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

By FATIMA HUSSEIN and KEVIN FREKING Associated Press 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 Related Articles How the military is dealing with Hegseth s order to remove transgender troops US to accept white South African refugees while other programs remain paused states including Minnesota sue over Trump s move to fast-track oil and gas projects via his power crisis order Mayor Baraka of Newark New Jersey arrested at immigration detention center he has been protesting Federal Reserve official sees signs of slowing business activity but not ready to cut rates A failure to suspend or increase the debt limit would wreak havoc on our financial system and diminish America s guard 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 governing body 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 announced 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 Strategy Center analysis published 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 statute to avert the last foreseen executive shutdown under his Democratic predecessor President joe Biden Anything else is a betrayal of our country Trump disclosed in a declaration in December That deal did not ultimately address the debt limit The letter to Johnson comes as Republicans consider a massive tax cut and boundary safeguard package that includes an increase in the debt limit Bessent s request could give GOP lawmakers greater incentive to reach an agreement