Congress should raise debt limit by July to avoid default, Bessent says

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Source: Washington Post

Lawmakers should raise the nation’s borrowing limit by mid-July to prevent the federal government from defaulting on its bills while Congress is away for its August recess, Treasury Secretary Scott Bessent said Friday.

In a letter to House Speaker Mike Johnson (R-Louisiana), Bessent said Treasury Department cash holdings and measures to put off certain payments would expire in August. But lawmakers are scheduled to be in their home districts for nearly that entire month, which could lead to the prospect of a catastrophic default if they don’t address the issue before they leave.

“I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States,” Bessent wrote.

The cap, also called the debt ceiling, sets the amount of money the federal government can borrow to pay for expenses it has already incurred. The government technically eclipsed the limit at the end of 2024, but the Treasury Department can take “extraordinary measures” to put off the need to take on more debt, and receipts from tax-filing season — which came in stronger than expected — also give the country more time to keep making payments.

Read more: https://wapo.st/4k5G8rE

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So they can put billionaire tax cut on a credit card.