The United States Secretary of the Treasury, Scott Bessent, stated on Sunday that the United States will “never default on its debt”, emphasizing the government’s ability to meet its obligations and aiming to address external concerns about the country’s public finances and debt credibility.
Bessent, speaking on CBS’s “Face the Nation” program on Sunday, stated, “I can say that the United States of America will never default. That is not going to happen. While we may have entered the danger zone, we will never hit that wall.”
When the show’s host, Margaret Brennan, further pressed on what measures the Treasury Department would take if Congress fails to pass a bill to raise the debt limit by mid-July, Bessent responded by emphasizing that the U.S. government will not disclose a specific “X-day” – the critical point where U.S. funding and accounting methods are exhausted and unable to meet obligations. He stated the deliberate decision not to provide an exact timeline is to urge Congress to advance the bill.
Bessent also discussed the tax reform bill of the Trump administration, which has passed the House of Representatives and is set for consideration in the Senate. Apart from including tax cuts and spending increases, the bill plans to raise the U.S. debt ceiling by $40 trillion.
According to the Congressional Budget Office (CBO), if the bill passes in the House version, it could increase the U.S. debt by approximately $4 to $5 trillion over the next decade.
Bessent pointed out that these estimates do not take into account additional potential revenue and cost-saving benefits, including up to $2 trillion in tariff revenue and the President’s prescription drug reform plan, which is expected to save the government another $1 trillion.
Recently, there have been warnings from Wall Street executives about potential pressure on the U.S. debt market. JPMorgan Chase CEO, Jamie Dimon, stated that the U.S. bond market is nearing a tipping point and without policy adjustments soon, the market could “crack,” potentially affecting global financial stability and the status of the U.S. dollar, leading to further concerns.
Bessent countered these statements on the show, mentioning his long-time acquaintance with Dimon, highlighting that Dimon has made similar predictions throughout his career that have not materialized. He emphasized that the current fiscal situation is not a sudden deterioration but the result of years of accumulation. Bessent stated, “We didn’t get to where we are today in just one year; this has been a long-term process. Our goal is to gradually reduce the deficit over the next four years and restore fiscal health by 2028.”
Despite concerns about the continuous expansion of the U.S. national debt, many economists point out that the U.S. government has sovereignty over issuing its own currency, enabling it to fulfill all debts in dollars, thus posing an extremely low risk of actual default.
The Treasury Department of the United States has also repeatedly emphasized that unless political gridlock in Congress leads to a failure in timely adjustments to the debt limit, the federal government itself does not lack debt repayment ability.
Bessent’s remarks echo this stance and release a stability signal. He told Brennan, “I am sitting here today instead of watching your program at home because I care about the debt level. What I want to say is that this year’s deficit will be lower than last year’s, and it will decrease further two years from now.”