1789,

DEPARTMENT OF THE TREASURY
WASHINGTON, D.c.

SECRETARY OF THE TREASURY

July 23, 2021

The Honorable Nancy Pelosi
Speaker

U.S. House of Representatives
Washington, DC 20515

Dear Madam Speaker:

As you know, the Bipartisan Budget Act of 2019 suspended the statutory debt limit through
Saturday, July 31, 2021. I am writing to inform you that beginning on Sunday, August 1, 2021,
the outstanding debt of the United States will be at the statutory limit.

Today, Treasury is announcing that it will suspend the sale of State and Local Government
Series (SLGS) securities at 12:00 p.m. on July 30, 2021. The suspension of SLGS sales will
continue until the debt limit is suspended or raised. If Congress has not acted to suspend or
increase the debt limit by Monday, August 2, 2021, Treasury will need to start taking certain
additional extraordinary measures in order to prevent the United States from defaulting on its
obligations.

Increasing or suspending the debt limit does not increase government spending, nor does it
authorize spending for future budget proposals; it simply allows Treasury to pay for previously
enacted expenditures. The current level of debt reflects the cumulative effect of all prior
spending and tax decisions, which have been made by Administrations and Congresses of both
parties over time. Failure to meet those obligations would cause irreparable harm to the U.S.
economy and the livelihoods of all Americans. Even the threat of failing to meet those
obligations has caused detrimental impacts in the past, including the sole credit rating downgrade
in the history of the nation in 2011. This is why no President or Treasury Secretary of either

party has ever countenanced even the suggestion of a default on any obligation of the
United States.

The period of time that extraordinary measures may last is subject to considerable uncertainty
due to a variety of factors, including the challenges of forecasting the payments and receipts of
the U.S. government months into the future, exacerbated by the heightened uncertainty in
payments and receipts related to the economic impact of the pandemic. Given this, Treasury is
not able to currently provide a specific estimate of how long extraordinary measures will last.
There are, however, scenarios in which cash and extraordinary measures could be exhausted
soon after Congress returns from recess. For example, on October 1 alone, cash and


extraordinary measures are expected to decrease by about $150 billion due to large mandatory
payments, including a Department of Defense-related retirement and health care investment.

In recent years Congress has addressed the debt limit through regular order, with broad
bipartisan support. I respectfully urge Congress to protect the full faith and credit of the

United States by acting as soon as possible.

Janet L. Yellen

Sincerely,

Identical letter sent to:
The Honorable Kevin McCarthy, House Republican Leader
The Honorable Charles E. Schumer, Senate Majority Leader
The Honorable Mitch McConnell, Senate Republican Leader

cc: The Honorable Richard E. Neal, Chairman, House Committee on Ways and Means
The Honorable Kevin Brady, Ranking Member, House Committee on Ways and Means
The Honorable Ron Wyden, Chairman, Senate Committee on Finance
The Honorable Mike Crapo, Ranking Member, Senate Committee on Finance