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U.S. Treasury Warns of Potential Default on $36 Trillion Debt in August, Urges Congress to Act by Mid-July Amid GOP's Bill for Trump's Agenda

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Updated May 10, 2025, 11:43 PM

Treasury Secretary Scott Bessent has warned Congress that the U.S. government could run out of money to pay its bills as early as August if the debt ceiling is not raised or suspended. In a letter to House Speaker Mike Johnson, Bessent urged lawmakers to act by mid-July, before Congress goes into its annual August recess, to avoid a potential default on the nation's more than $36 trillion debt. Bessent highlighted the use of 'extraordinary measures' by the Treasury Department since January to manage the government's finances within the current debt limit. These measures include halting investments in certain federal accounts to prevent breaching the debt ceiling. He noted that the exact timing of when these measures might be exhausted, known as the 'X-date,' remains uncertain but could occur in August. The urgency of the situation is compounded by the fact that Congress is scheduled to be in recess during August, which could complicate efforts to address the debt ceiling. Republicans, who control both chambers of Congress, are considering a comprehensive bill that includes raising the debt limit alongside other policy measures related to President Trump's agenda, but have yet to reach a consensus on the specifics.

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Sources

jiji.com(3)nbcnews.com(2)l.lexpress.fr(2)bloomberg.com(2)

NTD News

@NTDNews

The federal government is likely to exceed its statutory debt limit in August, when Congress is slated for a recess, according to Treasury Secretary Scott Bessent. https://t.co/ADnDyaXWqw

The Wall Street Journal

@WSJ

From @WSJopinion: Even the smallest business understands the importance of the balance sheet: what it owns vs. what it owes. Republicans are refocusing the federal government on the black-ink side of its ledger, writes @KimStrassel. https://t.co/smXLK3zChU