On Thursday, the United States reached its $31.381 trillion debt limit, prompting the Treasury Department under Janet Yellen to implement "extraordinary measures" in an attempt to pull the economy back from the brink of collapse.
The measures are expected to keep the US government up and running until June, however, Yellen has warned that what happens beyond then depends on how Congress acts now.
Yellen warned of the imminent debt debacle in a letter to Congressional leaders last week. She explained that the measures needed would include "redeeming existing, and suspending new, investments of the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health Benefits Fund (Postal Fund)," and also suspending "reinvestment of the Government Securities Investment Fund (G Fund) of the Federal Employees Retirement System Thrift Savings Plan."
American workers' 401(k)s are likely to be hit hard by the measures after sustaining massive losses over the past three years due to the pandemic, war in Ukraine, and the 2022 selloff, according to the Daily Mail.
Yellen called on Congress to "act in a timely manner to increase or suspend the debt limit," noting that, "failure to meet the government's obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability."
This comes as the US sent $48 billion in aid to Ukraine in 2022, including 22.9 billion in military aid, according to the Council on Foreign Relations.
In November, it was revealed that the Biden administration spent another $475 million in funds from the Provider Relief Fund to bolster the number of people receiving the booster vaccine, according to the New York Post. According to the CDC, just 15.8 percent of Americans over the age of five have received the most recent booster shot.
According to the Daily Mail, the US has raised or revised the debt ceiling seventy-eight times since 1960, each time the limit was reached.
This time around, such a move has been called out by Republicans, many of whom have voiced their opposition to raising the ceiling without further cuts in federal spending. Democrats, on the other hand, are pushing for nearly limitless expenditures.
During Wednesday's White House press briefing, Press Secretary Karine Jean-Pierre accused Republicans of "threatening to kill millions of jobs and 401K plans by trying to hold the debt limit hostage." GOP congress members justified their decision by noting that careless spending is part of what led to this situation in the first place.
"We cannot raise the debt ceiling," Rep. Andy Biggs tweeted. "Democrats have carelessly spent our taxpayer money and devalued our currency. They've made their bed, so they must lie in it."
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