US Treasury's Bessent extends measures to avoid debt ceiling breach

US Treasury Secretary Scott Bessent on Wednesday extended the department's authority to continue extraordinary cash management measures to keep from breaching the federal debt ceiling by nearly a month, until July 24.

Bessent said in a letter to congressional leaders that he had determined that the "debt issuance suspension period" previously scheduled to expire on Friday needed to continue. The declaration allows the Treasury to suspend funding from government pension and retiree healthcare funds that are not needed to pay immediate benefits.

Bessent has estimated that the Treasury would no longer be able to pay all of its obligations without an increase or suspension of the debt limit some time during the mid-to-late summer.

His letter did not provide any specific updates to this timing, although he told reporters on Tuesday that the so-called debt ceiling "X-date" could change if courts interfered with President Donald Trump's tariffs, which pulled in a record US$23 billion (HK$179.4 billion) in customs revenue during May.

But his extension to July 24 appeared partly aimed at keeping pressure on Congress to raise the debt ceiling as part of a massive tax-and-spending package before its traditional August recess.

"Based on our current estimates, we continue to believe that Congress must act to increase or suspend the debt ceiling as soon as possible before its scheduled August recess to protect the full faith and credit of the United States," Bessent said in the letter.

Reuters