US Treasury to take extraordinary measures to avoid debt default [Video]

The US Treasury Department will start taking “extraordinary measures” next week to avoid risking a default on government debt, Secretary Janet Yellen said Friday, days before President-elect Donald Trump takes office.

With the government reaching its borrowing limit, the department would start making the moves on Tuesday, Yellen said in a letter to congressional leaders.

Trump’s administration will have to grapple with the issue of the debt ceiling — the limit on government borrowing to pay bills already incurred.

But the lifting of this bar, while often routine in the past, has become a contentious issue.

On Friday, Yellen said: “The period of time that extraordinary measures may last is subject to considerable uncertainty.”

She noted there are challenges to forecasting the government’s payments and revenue months into the future.

“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Yellen wrote.

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