Treasury Secretary Scott Bessent seems earlier than the Home Monetary Providers Committee on Might 7, 2025 in Washington, DC.
Pete Marovich | Getty Photographs
Treasury Secretary Scott Bessent advised congressional leaders on Friday that the U.S. will doubtless run out of borrowing authority by August.
In a Might 9 letter, he urged them to increase the debt ceiling by July, earlier than Congress leaves for its annual August recess, as a way to avert financial calamity.
Bessent stated there may be “important uncertainty” within the actual date.
“Nevertheless, after receiving receipts for the latest April tax submitting season, there’s a cheap chance that the federal authorities’s money and extraordinary measures shall be exhausted in August whereas Congress is scheduled to be in recess,” Bessent wrote. “Due to this fact, I respectfully urge Congress to extend or droop the debt restrict by mid-July, earlier than its scheduled break, to guard the total religion and credit score of america.”
Republicans, who management the Home and Senate, plan to lift the debt ceiling by $4 trillion or $5 trillion of their sweeping party-line invoice to go President Donald Trump’s agenda. That is a tall order, because the celebration is struggling to unify on numerous elements of that laws with their slim majorities. It’s miles from clear they’re going to go a invoice earlier than August.
In the event that they fail in that timeline, they might should take care of the debt restrict problem individually and lean on Democratic help to resolve it and keep away from an financial disaster that might doubtless outcome from a default on U.S. debt.
“A failure to droop or improve the debt restrict would wreak havoc on our monetary system and diminish America’s safety and world management place,” Bessent wrote within the letter.