Treasury Secretary Scott Bessent Extends Debt-Limit Decision Deadline, Urges Congressional Action Ahead Of August Recess
Synopsis
Bessent urged Congress to act or increase or suspend the debt limit as soon as possible, before its scheduled August recess, to protect the full faith and credit of the United States.
Treasury Secretary Scott Bessent has informed lawmakers that the debt issuance suspension period has been extended to July 24. It was set to expire by Friday, June 27.
A debt limit suspension period is a minimum interval before Congress can address the debt limit again.
This latest move will allow the Treasury to suspend the investment of the portion of the pension and retiree health care funds that are not needed to pay immediate benefits.
The market could breathe a sigh of relief on the reprieve as it marches toward its record high, defying macro and geopolitical headwinds.
The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) have gained about 5% and 4%, respectively, so far this year.
Bessent repeated his May guidance to Congressional leaders in a letter addressed to House Speaker Mike Johnson and other Congressional members. “Based on current estimates, we continue to believe that Congress must act or increase or suspend the debt limit as soon as possible, before its scheduled August recess to protect the full faith and credit of the United States,” he said.
Bessent also said he would continue to update Congress as more information becomes available.
A Reuters report said suspending the debt issuance ceiling appears to be a strategy to pressure Congress to approve President Donald Trump’s “one big, beautiful” tax bill. The bill includes a provision for raising the debt ceiling limit.
Bessent told reporters on Tuesday that the “X-date” could change if courts stall President Donald Trump’s tariffs, which have reportedly raked in record customs revenue of $23 billion in May alone.
The X-date, a reference to the cut-off by which the Treasury will run out of cash to pay its bills, is now estimated to be between Aug. 15 and Oct. 3.
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