Treasury secretary calls on Congress to raise or suspend the debt ceiling by mid-July

WASHINGTON (AP) — The U.S. is on track to run out of money to pay its bills as early as August without congressional action, Treasury Secretary Scott Bessent warned Friday.

He is calling on Congress to either raise or suspend the debt ceiling by mid-July.

“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 wrote in the letter to House Speaker Mike Johnson. “Prior episodes have shown that waiting until the last minute to suspend or increase the debt limit can have serious adverse consequences for financial markets, businesses and the federal government.”

Earlier this week, Bessent twice testified in front of congressional committees that the Treasury’s debt ceiling is “on the warning track.”

After the debt limit was reinstated in January, Treasury Secretary Janet Yellen — in one of her last acts in the position — said the agency would institute “extraordinary measures” intended to prevent the U.S. from reaching the debt ceiling.

Since then, the Treasury Department has stopped paying into certain accounts, including a slew of federal worker pension and disability funds, to make up for the shortfall in money. Bessent has continued to notify Congress about the use of extraordinary measures in an effort to prevent a breach of the debt ceiling. In his latest letter, Bessent attributed the August deadline, known as the “X-date,” in part to receipts from the latest tax filing season.

A Bipartisan Policy Center analysis released in March estimated that the U.S. could run out of cash by mid-July if Congress did not raise or suspend the nation’s debt limit.

President Donald Trump had previously demanded that a provision raising or suspending the debt limit — something his own Republican Party routinely resists — be included in legislation to avert the last potential government shutdown under his Democratic predecessor, President joe Biden.

“Anything else is a betrayal of our country,” Trump said in a statement in December. That deal did not ultimately address the debt limit.

The letter to Johnson comes as Republicans consider a massive tax cut and border security package that includes an increase in the debt limit. Bessent’s request could give GOP lawmakers greater incentive to reach an agreement.