May 9, 2025 - Economy

Government could run out of cash when Congress is recessed, Bessent warns Johnson

House Speaker Mike Johnson and Treasury Secretary Scott Bessent. — Treasury Secretary Scott Bessent glances at House Speaker Mike Johnson during a White House event. Photo: Andrew Harnik/Getty Images

Treasury Secretary Scott Bessent warned Speaker Mike Johnson on Friday to raise the debt ceiling by mid-July, in case the government's extraordinary measures run out while Congress is on its August vacation.

Why it matters: The new so-called X-date is slightly more urgent than the messaging of just a few days ago, when the head of the Congressional Budget Office reportedly projected the government's cash and extraordinary measures might last until early September.

What they're saying: Bessent, in a letter to Johnson, said "there is a reasonable probability that the federal government's cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess."

"A failure to suspend or increase the debt limit would wreak havoc on our financial system and diminish America's security and global leadership position."

The big picture: The closer Congress gets to the X-date without a resolution on the debt ceiling, the more panicked markets may get about the risks to the global economy.

Bessent nodded at the memory of the 2011 debt crisis in his letter, warning of "serious adverse consequences" to waiting until the last minute.

The bottom line: The clock's ticking.

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Government could run out of cash when Congress is recessed, Bessent warns Johnson

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