Treasury Secretary Warns of Possible US Default
(MENAFN) Treasury Secretary Scott Bessent has cautioned that the US could default on its financial obligations by the close of summer.
In a letter to Congress on Friday, he urged lawmakers to take action either by raising or suspending the debt ceiling – the legal limit on government borrowing – to prevent a shortage of funds needed to cover federal expenses.
The United States reached its current statutory debt ceiling of USD36.1 trillion in January.
Once this threshold is hit, the government can no longer borrow money to fully meet its obligations on time.
As of now, the total national debt has increased to USD36.2 trillion, according to official records.
Despite this, the Treasury has been utilizing “extraordinary measures” – primarily accounting maneuvers such as halting payments into civil service retirement funds – to continue fulfilling its obligations and avoid default.
Republicans have reportedly been working on a legislative package that would raise the debt limit by as much as USD5 trillion, mainly by extending and expanding tax cuts from Leader Donald Trump’s 2017 tax reform.
However, recent reports suggest that talks are advancing slowly, and a resolution could take months.
Bessent mentioned that there is a “reasonable probability” the Treasury’s emergency measures will run out by August, coinciding with Congress’ scheduled summer recess.
He urged lawmakers to finalize the package by mid-July, warning that failing to meet this deadline could leave the government with no means to avert 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.
