Treasury Secretary Scott Bessent on Sunday said that the U.S. government will never default on its debt as the federal government faces a looming deadline to address the debt limit this summer.
Bessent appeared on CBS News’ “Face the Nation” and was asked about the tax package that Republicans in Congress are advancing, which includes a $4 trillion increase in the debt limit – enough to push the debt ceiling out roughly two years given federal budget deficits are close to $2 trillion annually.
CBS’ Margaret Brennan asked Bessent, “How close of a brush with default could this be” given potential changes to the bill and Congress needing to raise the debt limit by mid-July.
“Well, first of all, Margaret, I will say the United States of America is never going to default,” Bessent replied. “That is never going to happen, that we are on the warning track and we will never hit the wall.”
MOODY’S DOWNGRADES US CREDIT RATING OVER RISING DEBT
Bessent was asked if he thinks the government has more wiggle room if they don’t raise the debt limit by mid-July.
The treasury secretary responded and said that “we don’t give out the X date, because we want to use that to move the bill forward.”
Budget analysts have estimated that the so-called “X date” – when the Treasury will exhaust the budget tools known as extraordinary measures that it’s using to make debt payments – will most likely be reached in late summer.
US FACES DEFAULT RISK IN AUGUST IF DEBT LIMIT ISN’T RAISED, CBO ESTIMATES
The nonpartisan Congressional Budget Office estimated in March that those extraordinary measures “will probably be exhausted in August or September 2025” and noted there is uncertainty due to potential variations in tax collections and government spending, which could mean it arrives earlier or later than that range.
The Bipartisan Policy Center also released an estimate in March which reflected that uncertainty, projecting the X date would arrive between mid-July and early October.
TREASURY SECRETARY SCOTT BESSENT DISMISSES MOODY’S US CREDIT DOWNGRADE AS ‘LAGGING INDICATOR’
When the Treasury Department’s extraordinary measures are tapped out, the federal government could be forced to default on debt obligations, which the CBO’s report noted “could result in distress in credit markets, disruptions in economic activity, and rapid increases in borrowing rates for the Treasury.”
Concerns over the fiscal health and trajectory of the federal government recently prompted Moody’s Ratings to downgrade the U.S. credit rating one notch from the top tier of Aaa to Aa1, becoming the third of the three major credit ratings agencies to downgrade the U.S. government’s credit rating since 2011.
Moody’s said that the downgrade “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”
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