US Needs to Worry About Debt, Grow GDP: Rep. Greg Murphy

Republican Representative Greg Murphy said GOP lawmakers are making headway on key parts of a tax cut and spending bill, including on the state and local tax deduction, but the biggest issue is containing government debt.

Treasury Secretary Scott Bessent repeated his warning that his department is on the “warning track” toward exhausting its capacity to stay within the federal debt limit, while refraining from offering a specific timeframe on Tuesday.

“We will share with Congress when we believe we are” approaching the so-called X-date, when Treasury will be unable to pay all of the government’s bills on time, Bessent said in answering questions at the House Appropriations Committee. He said the Treasury is still tallying tax revenue from the latest filing season.

The debt ceiling kicked back in at the start of January, and the Treasury has been using special accounting maneuvers to avoid breaching the limit while maintaining payments on federal obligations. Wall Street analysts have estimated the Treasury has until an August-to-October period before it will need Congress to increase or set aside the debt limit.

“We are on the warning track,” Bessent said. He also reiterated that the US government will never default, and pledged that the Treasury will not use “gimmicks” to get around the debt limit.

The Treasury said last week it expected to offer a fresh timeline for how long its cash and extraordinary measures may last during the first half of May. Phillip Swagel, the director of the nonpartisan Congressional Budget Office, said Monday that federal revenues appear to be tracking earlier projections, suggesting the Treasury can last until “late in the summer — into August, into September.”

Congressional Republicans are seeking to raise the debt ceiling by $5 trillion — to about $41 trillion — this summer as part of a tax and spending cut package currently being drafted. Raising the ceiling wouldn’t authorize new spending, but would allow the government to meet obligations it has already incurred, including payments to bondholders, veterans and Social Security beneficiaries.

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