Yellen says Treasury is taking extraordinary measures to avoid default as U.S. hits debt limit

The Treasury Department started taking so-called extraordinary measures to keep paying the federal government’s bills as the U.S. hit its debt limit Thursday, Treasury Secretary Janet Yellen said.

In a letter addressed to House Speaker Kevin McCarthy, R-Calif., Yellen said the Treasury will suspend new investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund from Thursday until June 5, 2023. But she warned both moves are subject to “considerable uncertainty” if Congress does not pass a bill to increase the $31.4 trillion debt ceiling.

The Treasury secretary told lawmakers Friday that she believes the extraordinary steps could allow the government to pay its obligations until early June. Yellen last week urged Congress to “act in a timely manner to increase or suspend the debt limit,” as failing to do so could lead to a first-ever default on U.S. debt and cause economic damage around the world.

The White House also urged Congress on Friday to raise the debt ceiling “without condition.”