(Simone del Rosario)
A ceiling shadow has been cast over the Capitol this week. it is $36.2 trillion with national debt.
On Tuesday morning, President Donald Trump’s nominee for Treasury secretary, Scott Bessent, cleared his first confirmation hurdle from the Senate Finance Committee. At the same time, the government agency he hopes to lead began taking “special measures” to prevent the debt ceiling from being breached.
According to the Treasury Department, the national debt has already exceeded the allocated $36.1 trillion. To prevent further debt accumulation, government agencies responsible for paying government bills must use creative accounting practices.
Outgoing Treasury Secretary Janet Yellen warned last week that there is “significant uncertainty” over how long the department can use extraordinary measures to avoid a default on U.S. debt.
in the letter In a letter to House Speaker Mike Johnson on her last full day in office, she said: “While the debt limit does not authorize new spending, it does create a risk that the federal government will be unable to fund existing legal obligations imposed on Congress and the President,” as both have done in the past. I respectfully ask Congress to act quickly to fully protect the faith and credit of the United States. ”
Meanwhile, Yellen said she would postpone investments in retirement benefits for federal and Postal Service employees. However, this is not a permanent savings. These funds will need to be recovered if the debt ceiling is raised. The Treasury Department said federal retirees and employees are not affected by the suspension, which runs through March 14.
Tax revenue could lead to more debt ceiling fights, a threat looming in President Trump’s first week back in the Oval Office.
Raising the debt ceiling does not give the government a blank check to spend. It only authorizes the Treasury to make spending and debt obligations already approved by Congress. Congress most recently suspended the debt ceiling in June 2023, when it was at $31.4 trillion. The moratorium was lifted in January this year with a new debt ceiling of $36.1 trillion.
Since 1960, Ministry of Finance data shows that Congress has acted 78 times to adjust the debt ceiling. Although the United States has never defaulted on its debts, last-minute agreements to raise the limit or suspend it have hurt its standing. In 2023, Fitch Ratings and Moody’s downgraded the US credit rating.
Fitch said“Confidence in fiscal management has been eroded by repeated political conflicts and last-minute resolutions over debt limits.”
In December, President Trump proposed lifting the debt ceiling in a phone interview. NBC News.
NBC News: But he’d like to see it abolished completely. This is something that has actually been discussed mostly by Democrats in the past. But he said he welcomed it and would campaign actively. He argued that the debt ceiling is not working as intended, does not actually control debt at all, and that its effects are merely psychological.
Treasury Secretary Candidate Scott Bessent: If he wants to get rid of the debt limit, I’m going to work with him and you.
Sen. Elizabeth Warren (D-Mass.): Great, great, because I agree with President-elect Trump that the debt limit should be lifted.
SIMONE DEL ROSARIO: Mr. Bessent promised the Senate Finance Committee that if he is confirmed as Treasury secretary, the United States will not default on its debt.
His comments come as the United States faces its highest debt burden since just after World War II. bipartisan Congressional Budget Office I was warned last week This means that the U.S. debt is increasing faster than its revenue.
The CBO says the national debt held by the public will reach 100% of gross domestic product in 2025, but will increase to 118% in 2035. The previous record was 106%, set in 1946.
At this pace, CBO estimates that the national debt will reach $52 trillion in 10 years. For SAN, I’m an SDR.
