US Treasury Secretary Janet Yellen has warned congressional leaders of the need to use “extraordinary measures” from January 21, 2025, to prevent default. She said this in an official letter, emphasizing that the uncertainty with the receipt of payments makes it difficult to predict the duration of such measures. Yellen called on Congress to quickly decide to suspend the debt limit in order to maintain confidence in the country's economy.
According to the Treasury Department, the total U.S. national debt as of January 18, 2025, is about $36,19 trillion. To complicate matters, January 21 falls on the second day of Donald Trump's second term, adding to the political tension around how to address the issue.
The emergency measures the Treasury could use include rolling over some obligations, temporarily suspending payments on some social programs, and using other financial tools to reduce spending. However, these measures are temporary and cannot replace a long-term solution to the national debt problem. According to Yellen, such steps are necessary to protect the U.S. credit rating and prevent the economic consequences that could arise in the event of a default.
The political context adds to the complexity of the situation. The new Congress formed after the election is the scene of a bitter struggle between Republicans and Democrats. The Republican Party, which supports Trump, is pushing for cuts in government spending, which could complicate compromise.
Economists warn that a US default could have widespread repercussions on the global economy, including rising interest rates, falling stock markets and a decline in confidence in the dollar as a reserve currency. In 2011, a similar situation led to a short-term downgrade of the country's credit rating, which reverberated through financial markets.