Overview

• Treasury Secretary Scott Bessent has warned that the U.S. could default on its obligations as early as August if Congress does not address the debt ceiling.
• Bessent called on Congress to act by mid-July, before its scheduled recess, citing the exhaustion of extraordinary measures and federal cash reserves.
• House GOP leaders are crafting a reconciliation bill tying debt limit relief to broader legislative priorities from the Trump administration.
• Failure to act could destabilize financial markets, increase borrowing costs, and harm U.S. creditworthiness and global leadership, according to Bessent.
• The U.S. national debt exceeds $36 trillion, and raising the debt limit would allow the government to meet existing obligations rather than authorize new spending.