Janet Yellen Announces Debt Ceiling Will Be Hit One Day After Trump’s Inauguration

Outgoing Treasury Secretary Janet Yellen delivered a surprise announcement on her last day in office, revealing that the United States will hit its debt ceiling on January 21, the day after President-elect Donald Trump takes office. This abrupt news places immediate financial pressure on the incoming administration.

In a letter addressed to House Speaker Mike Johnson (R-LA) and other congressional leaders, Yellen confirmed that the Treasury Department will enact “extraordinary measures” to prevent a default. These measures include halting investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund.

“The period of time that extraordinary measures may last is subject to considerable uncertainty,” Yellen wrote, stressing the importance of swift congressional action to protect the nation’s financial standing.

Critics of the Biden administration quickly condemned the timing of Yellen’s announcement. Many accused her of intentionally delaying the news to burden President-elect Trump with a financial crisis. Social media erupted with claims that the outgoing administration was leaving behind a fiscal “trap.”

The national debt has soared past $36 trillion, exacerbated by years of bipartisan spending and rising inflation. Higher interest rates have also driven up the cost of managing the country’s debt, adding to the economic strain.

President-elect Trump has long criticized the debt ceiling, calling it an unnecessary restriction on government operations. His Treasury Secretary nominee, Scott Bessent, has expressed support for working with Trump to eliminate the borrowing cap if confirmed by the Senate.

Republicans in Congress are already debating how to address the looming debt crisis. The Freedom Caucus has proposed raising the debt ceiling by $4 trillion while demanding significant spending cuts. Trump reportedly favors a more aggressive approach to tackling the issue but is open to different solutions.

As Trump prepares to begin his second term, the debt ceiling battle will be his first major test, requiring immediate coordination between the White House and Congress.