United States Treasury Secretary Scott Bessent has issued a stark warning to Congress, stating that the U.S. could default on its debt as early as August unless urgent action is taken to raise or suspend the federal debt ceiling. In a letter addressed to House Speaker Mike Johnson, Bessent urged lawmakers to act before the legislative recess in mid-July, stressing the potential economic consequences of delay.

Bessent cited recent tax receipt data and projections showing that the Treasury’s cash reserves and so-called ‘extraordinary measures’ may be depleted by then. “Based on recent tax filings and outflow patterns, our resources may not be sufficient to meet federal obligations beyond mid-July,” Bessent warned.

The federal debt currently exceeds $36 trillion, and the debt ceiling only authorizes the payment of existing financial obligations. A failure to raise the limit would result in a default on those obligations, threatening global financial stability and domestic economic confidence.

While political negotiations over fiscal policy continue, Bessent’s letter is seen as a call for bipartisan cooperation to avert a potentially catastrophic financial event. Economists warn that even short-term uncertainty over debt payments can disrupt markets, increase borrowing costs, and erode global trust in U.S. fiscal reliability.

With the deadline looming and Congress set to recess in just weeks, pressure is mounting on both parties to find common ground and secure a timely resolution to the debt ceiling impasse.