WASHINGTON—Treasury Secretary Janet Yellen on Monday revealed further measures to avoid breaching the federal government’s borrowing limit and urged Congress to increase or suspend the ceiling, which went back into effect on Sunday.
Starting Monday, the Treasury Department will suspend reinvestments by a number of retirement funds for civil servants and postal workers, Ms. Yellen said in a letter to congressional leaders. The funds will be made whole once the debt limit is either suspended or increased, she said.
“I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible,” she said.
Congress voted in July 2019 to suspend the debt limit until July 31, 2021, after which the prior limit of $22 trillion would be reset to include any new borrowing in the intervening years. On Sunday, the limit was reinstated at around $28.5 trillion, a figure that includes debt held by the public and by government agencies.
The Treasury uses emergency accounting maneuvers to conserve cash so the government can keep paying its obligations to bondholders, Social Security recipients, veterans and others. Once those measures run out, the Treasury could begin to miss payments on its obligations, which could trigger a default on U.S. debt.
