US Treasury Secretary Urges Congress to Raise Debt Ceiling by Mid-July to Avoid Default

U.S. Treasury Secretary Scott Bessent has warned that the federal government could run out of money to pay its bills as early as August without congressional action to raise or suspend the debt ceiling. He has urged Congress to act by mid-July, before its August recess, to avoid a catastrophic default that could severely damage the financial system and America's global standing. The Treasury has been employing 'extraordinary measures' to manage cash shortfalls, including suspending payments into some federal accounts, but these are expected to be exhausted by August. Republicans, who control Congress, are attempting to pass a large debt ceiling increase through budget reconciliation to bypass a Senate filibuster, but intra-party disagreements may delay action. Failure to address the debt limit on time could force Republicans to seek Democratic support, raising concerns of political leverage and negotiation challenges. Bessent emphasized the urgency of maintaining the U.S. government's full faith and credit to prevent economic instability and uphold global financial market confidence.