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Bessent Warns Debt Ceiling Stalemate, Tax-Cut Lapse Could Spark Crisis and 6 M Job Losses

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Updated Jun 13, 2025, 05:58 AM

U.S. Treasury Secretary Scott Bessent warned that failure to raise the federal debt ceiling could ignite the most serious financial crisis since the 2008-09 meltdown. He told lawmakers the Treasury may be unable to meet its obligations as early as mid- to late summer, a period that could coincide with Congress’s August recess, raising the risk of a sovereign default.

Bessent put the fiscal-2025 budget deficit at between 6.5% and 6.7% of gross domestic product, describing the shortfall as “the biggest blow-out for the deficit in history.” He said the gap is poised to widen further without action to rein in spending or secure additional revenue.

The Treasury chief linked the fiscal outlook to the “One Big Beautiful Bill,” legislation backed by the White House that would permanently extend the 2017 Trump tax cuts and set new spending levels. Bessent said missing the bill’s 4 July deadline would amount to the largest tax increase in U.S. history, cost about 1.1 million manufacturing jobs and nearly 6 million jobs overall, and cut gross domestic product by roughly $1.1 trillion. “It would be cataclysmic,” he told Congress.

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Sources

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President Donald Trump and his White House team reportedly see the July 4 deadline for Congress to produce the president's signature tax cut and spending legislation as being nonnegotiable.