Urgent Call to Raise U.S. Debt Ceiling to Prevent Default

U.S. Treasury Secretary Scott Bessent urged Congress on Friday to raise the federal government's debt ceiling by mid-July to avert a potential default that could disrupt global markets. In a plea to congressional leaders, Bessent emphasized the need to extend the government's borrowing authority before August, amidst the 'reasonable probability' of a cash shortfall.

With the national debt standing at $36.2 trillion, exceeding the $36.1 trillion cap set by Congress in January, the Treasury has managed to stave off default through temporary measures, yet these will soon be insufficient. Republicans, who currently hold the majority in both the House and Senate, are advocating for comprehensive tax cuts and spending hikes, which would include raising the debt ceiling by at least $4 trillion.

The GOP aims to pass this critical package by Independence Day, amidst a backdrop of last-minute negotiations that historically unsettle financial markets, prompting leading credit agencies to reevaluate and lower their ratings of the nation's creditworthiness.

(With inputs from agencies.)