Treasury Secretary Janet Yellen says she’s taking ‘extraordinary’ steps to give lawmakers more time to raise the debt ceiling

US Treasury Secretary Janet Yellen sent a letter Tuesday to congressional leaders saying she is suspending the reinvestment of some federal bonds in a government worker savings plan – an additional “extraordinary” move to buy time for President Joe Biden and Congress to step up. national debt limit.

The government raged against the legal borrowing capacity on Thursdayprompting the Treasury to take steps to account for federal employee retirement and health care plans that would enable the government to remain open until roughly June.

Yellen said in the letter that on Monday she also determined that the government “will not be able to invest fully” in the government securities portion of the federal employees’ retirement system savings fund.

He noted that his predecessors took a similar action in the past, as by law the accounts “can be completely settled once. the debt limit extended or suspended.”

But it’s an open question how the White House and Congress will find common ground on the artificial cap imposed by Congress.

Biden and Republican House Speaker Kevin McCarthy have major differences over how to raise the debt ceiling, removing the possibility of extraordinary measures expiring this summer and risking a government default that could be devastating. in the economy.

Senate Republican Leader Mitch McConnell said the US would not default, but it was unclear how Biden would reconcile his insistence on a clean increase with McCarthy’s demand for spending cuts. .

White House press secretary Karine Jean-Pierre said at a press briefing on Monday that Biden would be “happy to talk to anyone who wants to deal” with reducing the deficit in a “responsible way.”

But Jean-Pierre said deficit reduction should not be tied to whether the US government pays its bills.

“This should be done without conditions,” said Jean-Pierre, adding, “Absolutely not – President Biden will not allow the Republicans to cut the benefits that our hardworking Americans get. This is their income.”

McCarthy has not yet outlined the scope or details of the cuts House Republicans want to see, though any final plan would have to pass the Democratic-controlled Senate and receive Biden’s signature.

“Families and businesses must live within a budget — so must Washington,” McCarthy tweeted Sunday.

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