Treasury Chief Cautions of Possible U.S. Default by Summer
(MENAFN) Treasury Secretary Scott Bessent has cautioned that the United States may be unable to meet its financial commitments by late summer. In a letter sent to Congress on Friday, he urged legislators to either raise or suspend the federal debt ceiling—the legal cap on government borrowing—to prevent a potential funding shortfall.
The U.S. reached its current debt limit of $36.1 trillion in January. After hitting this ceiling, the government is barred from borrowing additional funds to fully and promptly meet its financial responsibilities. As of now, official figures show the total national debt has climbed to $36.2 trillion. To keep operations running and avoid a default, the Treasury has been using ‘extraordinary measures’ such as suspending payments to civil service retirement programs.
Sources indicate that Republican lawmakers are developing a bill that could increase the debt ceiling by up to $5 trillion. This proposal is expected to be closely tied to the continuation and expansion of the 2017 tax cuts enacted under President Donald Trump. However, the negotiation process appears to be moving slowly and may extend over several months.
Bessent noted there is a “reasonable probability” that the Treasury’s temporary financial workarounds will be exhausted by August, coinciding with Congress’s planned recess. He urged lawmakers to complete legislative action by mid-July, cautioning that failure to do so could leave the government without viable options to avoid a default.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept
any responsibility or liability for the accuracy, content, images,
videos, licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright
issues related to this article, kindly contact the provider above.
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
