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debt ceiling
Treasury Chief Warns US Could Hit Debt Limit in Mid-January
Treasury Secretary Janet Yellen implored Congress to "protect the full faith and credit of the United States" or face imposition of "extraordinary measures."
Dec 27, 2024
U.S. Treasury Secretary Janet Yellen warned Congress on Friday that—absent imminent action to raise or suspend the nation's debt limit—her agency would likely have to take "extraordinary measures" as soon as January 14 to avert hitting the debt ceiling.
"As you know, the debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments," Yellen wrote in a letter sent to congressional leaders. "In June 2023, the Fiscal Responsibility Act of 2023 was enacted, suspending the debt limit through January 1, 2025."
DEBT LIMIT: New letter this afternoon from Treasury Secretary Janet Yellen projects debt limit will be reached a bit later than the earlier projection of Jan. 1; new limit to be reached between Jan 14-23 at which point Treasury will have to take extraordinary measures
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— Jane Norman (@janenorman.bsky.social) December 27, 2024 at 1:53 PM
Yellen continued:
On January 2, 2025, the new debt limit will be established at the amount of outstanding debt subject to the statutory limit at the end of the previous day. However, on January 2, the outstanding debt subject to the limit is projected to decrease by approximately $54 billion, mostly due to a scheduled redemption of nonmarketable securities held by a federal trust fund associated with Medicare payments. As a result, the debt is currently projected to temporarily decrease, and accordingly, Treasury does not expect that it will be necessary to start taking extraordinary measures on January 2 to prevent the United States from defaulting on its obligations. Treasury currently expects to reach the new limit between January 14 and January 23, at which time it will be necessary for Treasury to start taking extraordinary measures.
"I respectfully urge Congress to act to protect the full faith and credit of the United States," Yellen added.
Recent past extraordinary measures—which are invoked by the U.S. Treasury Department to prevent a binding debt limit—have included the declaration of a debt issuance suspension period, suspension of new investments, and suspension of reinvestment of certain securities.
Yellen's admonition comes less than one month before Republican President-elect Donald Trump takes office. Both Trump and Yellen have called for the elimination of the debt ceiling. The end-of-year spending bill signed into law last week by U.S. President Joe Biden did not include Trump's demand to raise or suspend the debt ceiling.
According to USDebtClock.org, the nation is currently more than $36.2 trillion in debt—or more than $107,000 for each of the country's more 346.3 million people.
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Call for $2.5 Trillion in Cuts Proves GOP Wants to 'Steal Our Benefits'
"Nearly 60% of mandatory spending is for Medicare and Social Security," noted one expert. "If they don't touch those, they'd have to cut Medicaid to the bone."
Dec 20, 2024
With a potential government shutdown just hours away, House Republican leaders displayed a slide during a closed-door GOP conference meeting on Friday showing a draft agreement proposing $2.5 trillion in net mandatory spending cuts in exchange for raising the U.S. debt ceiling by $1.5 trillion at some point next year.
The slide was seen as further confirmation that Republicans are seriously eyeing cuts to Social Security, Medicare, Medicaid, and federal nutrition assistance—programs that fall under the mandatory spending category.
Though by law Social Security cannot be cut in the reconciliation process that Republicans are planning to use to bypass the Senate filibuster and Democratic opposition in the upcoming Congress, other key programs including Medicare and Medicaid could be vulnerable to the GOP's massive proposed austerity spree.
"The ONLY WAY to cut $2.5 trillion in spending is by slashing Social Security, Medicare, and/or Medicaid," the progressive advocacy group Social Security Works (SSW) wrote on social media in response to the slide. "Republicans want to steal our benefits to pay for their billionaire tax cuts."
Bharat Ramamurti, former deputy director of the White House National Economic Council, wrote that the slide "is a Republican commitment to cut Medicare, Social Security, or veterans' benefits (all to make way for new tax cuts for the rich)."
"There's no way to make this math work otherwise," he added. "Their promise is to cut $2.5 trillion in mandatory spending. Nearly 60% of mandatory spending is for Medicare and Social Security. If they don't touch those, they'd have to cut Medicaid to the bone."
Sen. Elizabeth Warren (D-Mass.) warned that the draft agreement means "Republicans are plotting to cut healthcare for seniors and veterans to grease the wheels for tax cuts for giant corporations and billionaires like Elon Musk."
For weeks, Republicans have been discussing potential cuts and sweeping changes to Medicaid and the Supplemental Nutrition Assistance Program (SNAP)—including the addition of new work requirements—to help pay for a fresh round of tax cuts that would largely benefit the richest Americans and large corporations.
Republicans working with Musk and Vivek Ramaswamy—the billionaire co-chairs of the soon-to-be-created Department of Government Efficiency—have also signaled that Social Security and Medicare cuts are on the table even after President-elect Donald Trump campaigned on protecting the programs.
"Republicans have made their plan for the new year crystal clear: Ram through massive tax giveaways for the ultra-wealthy and corporations, and pay for them by shaking down programs and agencies that working families rely on," Groundwork Collaborative executive director Lindsay Owens wrote in a Rolling Stoneop-ed on Friday. "And they're putting unelected and unaccountable oligarchs—Musk and Ramaswamy—in charge of deciding how much pain Americans will have to tolerate so that the rich can get richer."
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'President Musk' Trends After Trump's Top Oligarch Torpedoes Federal Spending Deal
"Welcome to the Elon Musk presidency," wrote Democratic Rep. Robert Garcia.
Dec 19, 2024
Congress is careening toward a government shutdown after U.S. President-elect Trump, egged on by billionaire Elon Musk—who helped bankroll Trump's reelection campaign and is slated to help oversee cuts to government spending and regulation in the new administration—torpedoed a federal spending bill that would have kept the government open for the next few months.
The episode has drawn sharp rebuke from Democrats, and caused a number to muse whether it's Musk who's really in charge.
"The U.S. Congress this week came to an agreement to fund our government. Elon Musk, who became $200 BILLION richer since Trump was elected, objected. Are Republicans beholden to the American people? Or President Musk? This is oligarchy at work," wrote Sen. Bernie Sanders (I-Vt.) in a social media post late Wednesday.
During a Wednesday night appearance on MSNBC, Rep. Jasmine Crockett (D-Texas) called Musk "basically a shadow president."
These sorts of remarks continued Thursday, with Rep. Robert Garcia (D-Calif.) writing: "Welcome to the Elon Musk presidency, where Donald Trump is now clearly the vice president. They want a government shutdown that would hurt millions of Americans. It’s totally insane," wrote Rep. Robert Garcia (D-Calif.)
Former Secretary of Labor Robert Reich echoed this sentiment in an opinion piece for Common Dreams published Thursday, writing: "If this isn't oligarchy, I don't know what is. You may not get access to services you depend on just before the holidays because an unelected billionaire shadow president wanted it that way."
[Related: If Musk Blocking a Key Spending Bill Isn’t Oligarchy, I Don’t Know What Is ]
Trump and Vice President-elect JD Vance threw cold water on the spending bill Wednesday afternoon with a joint statement, arguing that the bill included "DEMOCRATIC GIVEAWAYS." The directive from Trump came after Musk spent much of Wednesday airing his opposition to the spending package on the platform X, which he owns. In total, Musk shot off over 150 posts demanding the members of the GOP back away from the spending bill, according to The New York Times.
The bipartisan spending package unveiled by House Speaker Mike Johnson (R-La.) on Tuesday would have funded the government at current levels through March 14, and also provided some $100 billion for disaster relief as well as $10 billion in economic relief for farmers.
In their statement denouncing the bill, Vance and Trump also called for an increase to the debt ceiling—adding the fraught issue of national debt, which currently stands at more than $36 trillion, into the debate. Trump also called for getting rid of the debt ceiling entirely, according to Thursday reporting from NBC News.
Sen. Chris Murphy (D-Conn.) said this of the debt ceiling demand: "Ha! Trump wants to lift the debt ceiling for one reason and one reason only—so he can borrow shitloads of money to afford his new giant tax break for billionaires and corporations. In other words, saddle regular Americans with mountains more debt so the rich can get richer."
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