Bessent says US will never default as Congress faces endgame
US Treasury Secretary Scott Bessent looks on during a press conference in the Oval Office at the White House on May 30. PHOTO: EPA-EFE
Bessent says US will never default as Congress faces endgame
WASHINGTON – Treasury Secretary Scott Bessent said the US 'is never going to default' as the deadline for increasing the federal debt ceiling gets closer.
'That is never going to happen,' Mr Bessent said on June 1 in an interview with CBS's Face the Nation. 'We are on the warning track and we will never hit the wall.'
Republican congressional leaders have attached an increase in the debt limit to President Donald Trump's tax and spending Bill, which potentially puts avoiding a default at the mercy of complex negotiations over the legislation. The US Senate returns this week to take up the Bill.
Mr Bessent declined to specify an 'X date' – the point at which the Treasury runs out of cash and special accounting measures that allow it to stay within the debt ceiling and still make good on federal obligations on time.
'We don't give out the 'X date' because we use that to move the Bill forward,' Mr Bessent said. In May, Mr Bessent told lawmakers that the US was likely to exhaust its borrowing authority by August if the debt ceiling isn't raised or suspended by then.
Wall Street analysts and private forecasters see the deadline falling sometime between late August and mid-October.
Mr Bessent also pushed back against a warning by JPMorgan Chase & Co Chief Executive Officer Jamie Dimon that a crack in the bond market 'is going to happen.'
'I've known Jamie for a long time, and for his entire career he's made predictions like this,' he said. 'Fortunately none of them have come true. That's why he's a great banker. He tries to look around the corner.'
'We are going to bring the deficit down slowly,' Mr Bessent said. 'This has been a long process, so the goal is to bring it down over the next four years.'
China call
After Mr Trump last week accused authorities in Beijing of violating a US-Chinese tariff truce reached in May, Bessent said he's confident that the latest clash 'will be ironed out' in a call between Trump and Chinese President Xi Jinping 'very soon.'
White House National Economic Council Director Kevin Hassett said the call is expected to take place this week.
Mr Trump 'is going to have a wonderful conversation about the trade negotiations this week with President Xi,' Mr Hassett said on ABC's This Week. 'That's our expectation.'
US Trade Representative Jamieson Greer on May 30 accused China of failing to comply with elements of the trade agreement brokered in Geneva, saying Beijing continues to 'slow down and choke off things like critical minerals and rare-earth magnets.'
'Maybe it's a glitch in the Chinese system, maybe it's intentional,' Mr Bessent said on June 1. 'We'll see after the president speaks with the party chairman.'
He also suggested any impact on the US construction industry from Mr Trump's decision to double US tariffs on steel and aluminum imports to 50 per cent would be offset by benefits to the steel industry.
'So is it going to impact the construction industry, maybe,' Mr Bessent told CBS. 'But it's going to impact the steel industry in a great way. BLOOMBERG
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