Treasury secretary calls on Congress to raise or suspend the debt
ceiling by mid-July
[May 10, 2025]
By FATIMA HUSSEIN and KEVIN FREKING
WASHINGTON
(AP) — The U.S. is on track to run out of money to pay its bills as
early as August without congressional action, Treasury Secretary Scott
Bessent warned Friday.
He is
calling on Congress to either raise or suspend the debt ceiling by
mid-July. |
Treasury Secretary Scott Bessent testifies before the House Committee on
Appropriations, Subcommittee on Financial Services and General
Government, oversight hearing of the U.S. Department of the Treasury on
Capitol Hill in Washington, Tuesday, May 6, 2025. (AP Photo/Jose Luis
Magana) |
|
“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 to
House Speaker Mike Johnson. “Prior episodes have shown that
waiting until the last minute to suspend or increase the debt
limit can have serious adverse consequences for financial
markets, businesses and the federal government.”
Earlier this week, Bessent twice testified in front of
congressional committees that the Treasury's debt ceiling is “on
the warning track.”
After the debt limit was reinstated in January, Treasury
Secretary Janet Yellen — in one of her last acts in the position
— said the agency would institute “extraordinary measures"
intended to prevent the U.S. from reaching the debt ceiling.
Since then, the Treasury Department has stopped paying into
certain accounts, including a slew of federal worker pension and
disability funds, to make up for the shortfall in money. Bessent
has continued to notify Congress about the use of extraordinary
measures in an effort to prevent a breach of the debt ceiling.
In his latest letter, Bessent attributed the August deadline,
known as the “X-date,” in part to receipts from the latest tax
filing season.
A Bipartisan Policy Center analysis released in March estimated
that the U.S. could run out of cash by mid-July if Congress did
not raise or suspend the nation’s debt limit.
President Donald Trump had previously demanded that a provision
raising or suspending the debt limit — something his own
Republican Party routinely resists — be included in legislation
to avert the last potential government shutdown under his
Democratic predecessor, President joe Biden.
“Anything else is a betrayal of our country,” Trump said in a
statement in December. That deal did not ultimately address the
debt limit.
The letter to Johnson comes as Republicans consider a massive
tax cut and border security package that includes an increase in
the debt limit. Bessent’s request could give GOP lawmakers
greater incentive to reach an agreement.
All contents © copyright 2025 Associated Press. All rights
reserved |
|
|
