U.S. Treasury Secretary Scott Bessent on Friday urged Congress to raise the federal government's debt limit by mid-July to avoid a default that would upend global markets.
Bessent told congressional leaders that they needed to extend the U.S. government's borrowing authority before August, warning that there is a "reasonable probability" the federal government would run short of cash to cover its obligations at that point.
"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 a letter.
The U.S. debt currently stands at $36.2 trillion, according to the Treasury Department, above the $36.1 trillion limit set by Congress in January. The Treasury Department has been using temporary financial measures to avoid default, but Bessent warned that it will not be able to do so indefinitely.
Republicans who control the House of Representatives and the Senate are trying to advance a sweeping package of tax cuts and spending hikes that would also raise the debt limit by at least $4 trillion.
Republicans aim to pass that package by July 4.
Lawmakers have repeatedly taken negotiations over raising the government's borrowing limit to the last minute, a trend that has rattled financial markets and led the major credit agencies to on the federal government's creditworthiness.
