On May 9, 2025, Treasury Secretary Scott Bessent issued a stark warning that the United States could run out of emergency debt limit measures by August, risking a default on government obligations unless Congress acts swiftly. In a formal letter to House Speaker Mike Johnson, Bessent urged lawmakers to raise or suspend the debt ceiling by mid-July, citing the upcoming congressional recess as a critical deadline.
Since the debt ceiling was reinstated in January, the Treasury has relied on temporary accounting maneuvers—known as extraordinary measures—to continue funding government operations. However, Bessent made clear that these options are running out and that failure to act in time could lead to serious financial and economic consequences.
In response, House Republicans are working on a sweeping budget package that would increase the debt ceiling by $5 trillion. The proposed legislation includes tax cuts, spending reductions, and increased funding for defense and border security. Lawmakers hope to pass the package by July 4 using the budget reconciliation process, which would bypass a potential filibuster in the Senate.
Despite this plan, internal disagreements within the GOP have delayed progress, raising concerns about whether Congress can meet the mid-July timeline. Financial markets are already showing signs of anxiety, and economists warn that missing the deadline could harm the U.S.’s credit rating and global economic stability.
Bessent’s warning highlights the growing urgency in Washington to find a bipartisan solution before the nation reaches its borrowing limit and triggers a fiscal crisis.
