Treasury Secretary Scott Bescent urged Congress on Friday to raise the national debt ceiling by mid-July, aiming to prevent the federal government from defaulting on its debts, which exceed $36 trillion.
In a letter to Speaker Mike Johnson (R-LA), Bescent expressed concern that the government’s cash reserves and extraordinary measures might be depleted by August, coinciding with Congress’s scheduled breaks.
“I encourage Congress to increase or suspend debt limits by mid-July to uphold the creditworthiness of the United States before the break,” he stated.
Republicans are looking to employ a process called budget reconciliation to increase their debt limits this year. This approach is designed to enable them to raise the debt ceiling while advancing a broader agenda laid out by President Trump, relying solely on Republican votes.
This strategy could help them sidestep Democratic demands for compromises in exchange for votes, but it also creates a deadline for significant legislation that has sparked debate among conservatives.
The last time Congress suspended the debt limit was through a bipartisan measure negotiated between former President Biden and GOP leaders in 2023, postponing the threat of national default until early 2025.
However, Treasury Secretary Janet Yellen warned in January that the government would have to take “extraordinary measures” as it was projected to hit the debt limit again soon.
With the debt ceiling in place, how much can the Treasury actually borrow to cover government expenses?
Republicans have suggested that Democrats might leverage this situation to extract key concessions, pushing Trump to advocate for increasing the debt ceiling ahead of time.
House GOP leaders also used the debt ceiling as a bargaining chip during the Biden administration to compel Democrats to negotiate, resulting in a prolonged standoff. Ultimately, this high-stakes conflict led to a bipartisan agreement to suspend the debt limit, but not without contributing to another downgrade of the nation’s credit rating.
In a memo to lawmakers on Friday, Bescent cautioned, “Past experiences indicate that delaying the suspension or increase of debt limits can significantly raise short-term borrowing costs for financial markets, businesses, the federal government, and taxpayers.”
“The Treasury Department’s Borrowing Advisory Committee highlighted these risks in a report released on April 29, 2025, which pointed to potential volatility, increased costs, damage to U.S. financial stability, and heightened default risks,” he added.
Updated at 5:14 PM
