WASHINGTON — Treasury Secretary Scott Bessent told congressional leaders on Friday that the U.S. will likely run out of borrowing authority by August.
In a May 9 letter, he urged them to extend the debt ceiling by July, before Congress leaves for its annual August recess, in order to avert economic calamity.
Bessent said there is "significant uncertainty" in the exact date.
"However, after receiving receipts for the recent April tax filing season, there is a reasonable probability that the federal government's cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess," Bessent wrote. "Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States."
Republicans, who control the House and Senate, plan to raise the debt ceiling by $4 trillion or $5 trillion in their sweeping party-line bill to pass President Donald Trump's agenda. That's a tall order, as the party is struggling to unify on various components of that legislation with their narrow majorities. It's far from clear they'll pass a bill before August.
If they fail in that timeline, they may have to deal with the debt limit issue separately and lean on Democratic support to resolve it and avoid an economic crisis that would likely result from a default on U.S. debt.
“A failure to suspend or increase the debt limit would wreak havoc on our financial system and diminish America’s security and global leadership position,” Bessent wrote in the letter.
