Implementation of ‘special measures’ by the Ministry of Finance
The US federal government reached its debt ceiling on the 19th (local time) and entered into special measures.
Treasury Secretary Janet Yellen sent a letter to Congress on the same day, announcing that the Treasury Department would begin implementing special measures from today. Accordingly, the US government plans to suspend new investments in the retirement pension for civil servants, the disability pension, and the health insurance fund for postal retirees.
The reason why the Treasury Department is implementing such special measures is to prevent the government from defaulting on debt as the United States reached its legal debt ceiling ($31.381 trillion) on this day. Previously, Secretary Yellen said in a letter to Congress on the 13th that “the US debt is expected to reach the statutory limit as of January 19th.” Treasury special measures will be suspended on June 5.
The White House is calling for a swift debt ceiling increase without preconditions. “It’s a question of economic stability or chaos,” White House National Economic Council Director Brian Dees told CNN on the same day.
On the other hand, the Republican Party, which won a majority in the House in the midterm elections last year, is making large-scale government spending cuts a prerequisite for raising the debt ceiling.
Republican House Speaker Kevin McCarthy said in an interview with Fox News on the 15th, “All governments must balance their budgets.” ” he said.
The debt ceiling is a statutory limit on how much money the US government can borrow. If the Joe Biden administration and the Republican Party fail to reach an agreement until the end of the special measures, it is expected to deal a serious blow to the global economy.
Congress has raised the government debt ceiling 78 times since 1960.
