U.S. Treasury Secretary Bessant extends "moratorium" to avoid breaching the debt ceiling

U.S. Treasury Secretary Bessant on Wednesday extended the Treasury Department's authorization to continue extraordinary cash management measures to prevent breaching the federal debt ceiling by nearly a month, to July 24.

In a letter to congressional leaders, Bessant said he had determined that the "moratorium" that was scheduled to expire on Friday needed to continue. The declaration allows the Treasury to suspend withdrawals from government pension and retiree health funds for benefits that do not need to be paid immediately. Bessant estimated that if the debt ceiling is not raised or suspended, the Treasury will not be able to continue to pay all debts in the middle and late summer.

His letter did not provide an update on a specific date, but he told reporters on Tuesday that the so-called debt ceiling "X day" could change if the courts intervene in President Trump's tariff policy. Trump's tariffs brought in a record $23 billion in customs revenue in May. But part of his purpose in extending the debt ceiling to July 24 seems to be to keep pressure on Congress to raise the debt ceiling before the traditional August recess as part of a massive tax and spending package.

“Based on our current estimates, we continue to believe that Congress must act to raise or suspend the debt ceiling as soon as possible, before the August recess, to protect the full confidence and credit of the United States,” Bessant said in the letter.