US nears US$36t debt ceiling in August, Treasury chief urges urgent action to prevent default
WASHINGTON, May 10 — There is a 'reasonable probability' the United States will hit its borrowing limit in August when Congress is in recess, Treasury Secretary Scott Bessent said yesterday, calling on lawmakers to act.
'I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States,' he wrote in a letter to the speaker of the House of Representatives, Mike Johnson.
The United States exceeded a roughly US$36 trillion congressionally approved borrowing cap in January this year, forcing the Treasury Department to take 'extraordinary measures' to avert the risk of a government default.
The Republican-controlled Congress has been in talks to increase the threshold as part of a broader suite of tax-and-spend measures based on President Donald Trump's policy priorities.
But the talks have so far failed to translate into legislation that can pass both the House and the Senate, spurring Bessent's letter.
'Prior episodes have shown that waiting until the last minute... can have serious adverse consequences for financial markets, businesses and the federal government,' he said.
'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 added. — AFP
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