US Secretary of the Treasury Janet Yellen in a letter sent to congressional leaders on Friday afternoon said her agency would need to start taking “extraordinary measures” or special accounting maneuvers intended to prevent the nation from hitting the debt ceiling as early as Jan. 14.
“Treasury expects to hit the statutory debt ceiling between January 14 and January 23,” Yellen wrote in a letter addressed to US House and Senate leadership, at which point extraordinary measures would be used to prevent the government from breaching the nation’s debt ceiling — which has been suspended until Wednesday.
The department has in the past deployed what are known as “extraordinary measures” or accounting maneuvers to keep the government operating. However, once those measures run out, the government risks defaulting on its debt unless lawmakers and the president agree to lift the limit on the US government’s ability to borrow.
Photo: Reuters
“I respectfully urge Congress to act to protect the full faith and credit of the United States,” she said.
The news comes after US President Joe Biden signed a bill into law last week that averted a government shutdown, but did not include US president-elect Donald Trump’s demand to raise or suspend the nation’s debt limit. The bill was approved by Congress only after fierce internal debate among Republicans over how to handle Trump’s demand.
“Anything else is a betrayal of our country,” Trump said in a statement.
After a protracted debate in the summer of last year over how to fund the government, policymakers crafted the Fiscal Responsibility Act, which included suspending the nation’s US$31.4 trillion borrowing authority until Jan. 1, 2025.
The US federal debt stands at roughly US$36 trillion — which ballooned across Republican and Democratic administrations. The spike in inflation after the COVID-19 pandemic pushed up government borrowing costs such that debt service next year would exceed spending on national security.
Republicans, who would have full control of the White House, House and Senate in the new year, have big plans to extend Trump’s 2017 tax cuts and other priorities, but debate over how to pay for them.
ELECTRONICS BOOST: A predicted surge in exports would likely be driven by ICT products, exports of which have soared 84.7 percent from a year earlier, DBS said DBS Bank Ltd (星展銀行) yesterday raised its GDP growth forecast for Taiwan this year to 4 percent from 3 percent, citing robust demand for artificial intelligence (AI)-related exports and accelerated shipment activity, which are expected to offset potential headwinds from US tariffs. “Our GDP growth forecast for 2025 is revised up to 4 percent from 3 percent to reflect front-loaded exports and strong AI demand,” Singapore-based DBS senior economist Ma Tieying (馬鐵英) said in an online briefing. Taiwan’s second-quarter performance beat expectations, with GDP growth likely surpassing 5 percent, driven by a 34.1 percent year-on-year increase in exports, Ma said, citing government
‘REMARKABLE SHOWING’: The economy likely grew 5 percent in the first half of the year, although it would likely taper off significantly, TIER economist Gordon Sun said The Taiwan Institute of Economic Research (TIER) yesterday raised Taiwan’s GDP growth forecast for this year to 3.02 percent, citing robust export-driven expansion in the first half that is likely to give way to a notable slowdown later in the year as the front-loading of global shipments fades. The revised projection marks an upward adjustment of 0.11 percentage points from April’s estimate, driven by a surge in exports and corporate inventory buildup ahead of possible US tariff hikes, TIER economist Gordon Sun (孫明德) told a news conference in Taipei. Taiwan’s economy likely grew more than 5 percent in the first six months
SMART MANUFACTURING: The company aims to have its production close to the market end, but attracting investment is still a challenge, the firm’s president said Delta Electronics Inc (台達電) yesterday said its long-term global production plan would stay unchanged amid geopolitical and tariff policy uncertainties, citing its diversified global deployment. With operations in Taiwan, Thailand, China, India, Europe and the US, Delta follows a “produce at the market end” strategy and bases its production on customer demand, with major site plans unchanged, Delta president Simon Chang (張訓海) said on the sidelines of a company event yesterday. Thailand would remain Delta’s second headquarters, as stated in its first-quarter earnings conference, with its plant there adopting a full smart manufacturing system, Chang said. Thailand is the firm’s second-largest overseas
SUPPLY RESILIENCE: The extra expense would be worth it, as the US firm is diversifying chip sourcing to avert disruptions similar to the one during the pandemic, the CEO said Advanced Micro Devices Inc (AMD) chief executive officer Lisa Su (蘇姿丰) on Wednesday said that the chips her company gets from supplier Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would cost more when they are produced in TSMC’s Arizona facilities. Compared with similar parts from factories in Taiwan, the US chips would be “more than 5 percent, but less than 20 percent” in terms of higher costs, she said at an artificial intelligence (AI) event in Washington. AMD expects its first chips from TSMC’s Arizona facilities by the end of the year, Su said. The extra expense is worth it, because the company is
RSS