US Treasury Chief: Urges Congress to Raise Ceiling

In an interview with CBS News, he said: 

“The United States will never default. That will never happen; we are on the warning line and will not hit the wall.” 

Bessent’s remarks came as Congress approaches the mid-July deadline to raise the debt ceiling. Current estimates indicate that the government’s borrowing authority will be exhausted by that date. Bessent warned that if the debt ceiling is not raised before then, the government may lose its ability to make debt payments. Budget analysts predict the Treasury will exhaust its extraordinary measures to make debt payments by the end of summer. 

Bessent also pushed back against JPMorgan CEO Jamie Dimon’s warnings of a collapse in the U.S. bond market. Dimon criticized government spending post-pandemic and quantitative easing policies. He suggested that rising debt levels could increase the risk of a future crisis. However, Bessent noted that Dimon’s past predictions have not come true: 

“I’ve known Jamie for a long time, and throughout his career, he has made such predictions. Fortunately, none have been accurate,” he said. 

Bessent said that reducing the debt level will be a gradual process over four years. Additionally, former President Trump used his proposed tax and spending package as a tool to raise the debt ceiling. This package could further increase the debt level. 

These concerns led Moody’s Ratings to downgrade the US credit rating from the highest level, Aaa, to Aa1. Moody’s became the third major credit rating agency to downgrade the U.S. government’s credit rating since 2011. 

US Treasury Secretary Scott Bessent emphasizes that the country will not default despite its debt load. He called on Congress to raise the debt ceiling. However, concerns about debt sustainability and economic stability remain. 

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