Treasury Secretary Janet Yellen sent a letter to congressional leaders Tuesday, informing them that she will be withholding certain government retirement funds to avoid breaching the debt ceiling. She also urged congress to take action on the issue. File Photo by Al Drago/UPI | License Photo
Jan. 24 (UPI) -- The United States Treasury Secretary, Janet L. Yellen, has sent a letter to congressional leaders informing them that she will not invest certain government retirement funds in securities to avoid breaching the debt ceiling. Yellen also urged congress to take action to address the issue.
The debt ceiling, which represents the maximum amount of debt the government is allowed to incur to finance payments Congress has already authorized, currently stands at $31.4 trillion. The United States hit that limit on Thursday.
"As of January 23, I have also determined that, by reason of the statutory debt limit, I will be unable to invest fully the Government Securities Investment Fund (G fund) of the Thrift Savings Fund, part of the Federal Employees' Retirement System, in interest-bearing securities of the United States," Yellen wrote in the letter sent to congressional leaders Tuesday.
"The statute governing G Fund investments expressly authorizes the Secretary of the Treasury to suspend investment of the G Fund to avoid breaching the statutory debt limit," she continued.
Yellen pointed out that, by law, the G Fund would be restored if the debt limit were increased or suspended.
"I respectfully urge Congress to act promptly to protect the full faith and credit of the United States," she concluded.
Yellen has said government cash and extraordinary measures can be used to keep the government from defaulting on its debt obligations but likely will be exhausted before early June.
House Speaker Kevin McCarthy has said Republicans will seek spending cuts before agreeing to raise the debt ceiling, but President Joe Biden has said that raising the debt ceiling is "not negotiable."
The U.S. has never defaulted on its debt, and Congress has raised the debt ceiling about 80 times since 1960.