Bessent Tells Congress to Lift Debt Ceiling by Mid-July as Treasury Cash Could Run Out in August

33 posts • OpenAI (o3)

Updated May 10, 2025, 12:22 AM

U.S. Treasury Secretary Scott Bessent has warned lawmakers that the Treasury could run out of room to maneuver under the statutory debt ceiling in August, risking a possible default if Congress fails to act.

In a 9 May letter to Speaker Mike Johnson and other congressional leaders, Bessent urged Congress to raise or suspend the debt limit by mid-July, before lawmakers leave for their August recess. He said Treasury’s ability to rely on so-called extraordinary measures—special accounting techniques that create temporary borrowing capacity—would likely be exhausted the following month.

The federal government’s outstanding debt now exceeds $36 trillion. Allowing the ceiling to bind could force the Treasury to delay payments or miss obligations, a scenario that analysts warn would disrupt global financial markets and lead to higher borrowing costs for taxpayers.

Bessent’s timetable intensifies pressure on Capitol Hill, where Republican leaders plan to fold a debt-limit increase into a broader reconciliation package advancing President Trump’s policy agenda. The warning leaves lawmakers little more than two months to strike a deal and prevent a lapse in the government’s ability to fund itself.

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Sources

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Manu Raju

@mkraju

The debt limit hike is included in Trump’s big bill — which means avoiding a debt default will be used by WH and GOP leaders as leverage to get Rs to vote for it. The August recess is now the new deadline to pass the reconciliation bill. https://t.co/6E1PIGTVTK

Speaker Mike Johnson

@SpeakerJohnson

.@SecScottBessent’s timely debt limit letter underscores the urgency for Congress to enact the agenda of @POTUS. Republicans are working around the clock to deliver The One, Big, Beautiful Bill that reduces spending, secures the border, protects Medicaid, unleashes American https://t.co/9rBmEV5zmQ