During a hearing on Capitol Hill, Treasury Secretary Scott Bessent warned that the U.S. is expected to reach its borrowing limit by August. In a letter dated May 9, Bessent urged congressional leaders to extend the debt ceiling by July to prevent a potential economic crisis. He emphasized the importance of taking action before the August recess to protect the country’s financial stability. The Treasury Secretary highlighted the uncertainty of the exact date but suggested that the government’s funds could be depleted in August. Bessent called on Congress to raise or suspend the debt limit by mid-July to uphold the United States’ creditworthiness. Republicans are aiming to increase the debt ceiling by $4 trillion or $5 trillion through a party-line bill to advance President Donald Trump’s agenda; however, achieving consensus within the party may pose a challenge. If a bill is not passed before August, they may need Democratic support to address the debt limit separately and avoid a potential economic crisis. Bessent emphasized the severe consequences of failing to raise the debt limit, stating that it could disrupt the financial system and undermine America’s security and global leadership position.
