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Treasury advises Congress must deal with debt limit before August or face default

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2 months ago

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kentuckylantern.com – Jennifer Shutt – 2025-05-09 17:37:00


Treasury Secretary Scott Bessent has warned Congress that it must address the nation’s debt limit by mid-July to prevent a default in August. The Treasury Department’s deadline comes as Republicans push to raise the limit by up to \$5 trillion through a reconciliation package, which could also address tax laws, higher education aid, and federal spending cuts. Bessent cautioned lawmakers against waiting until the last minute, highlighting the potential economic consequences of a default, including disruptions to federal programs and a downturn in the global economy. A failure to act could lead to delayed or non-existent payments for crucial services like Social Security and Medicare.
 

by Jennifer Shutt, Kentucky Lantern
May 9, 2025

WASHINGTON — The Treasury Department announced Friday that Congress must address the debt limit before August, setting a firm deadline for Republicans to wrap up work on the “big, beautiful bill” that will raise the nation’s borrowing limit by up to $5 trillion.

Treasury Secretary Scott Bessent wrote in a letter to congressional leaders that “there is a reasonable probability that the federal government’s cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess.

“Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July, before its scheduled break, to protect the full faith and credit of the United States.”

The projection marks the first time the Trump administration has weighed in publicly on when the government will likely reach default since the last suspension expired in January. 

In the months since then, the Treasury Department has used accounting maneuvers known as extraordinary measures to pay all of the country’s bills in full and on time.

Treasury’s projection is similar to a report the nonpartisan Congressional Budget Office released in March predicting the country would reach default in August or September unless Congress acted before then.

Reconciliation package

Republicans are hoping to lift the debt limit without having to negotiate a bipartisan agreement with Democrats, which is typically how lawmakers have addressed the debt limit during the past couple decades.

GOP leaders plan to raise the debt limit by between $4 trillion and $5 trillion in the 11-bill reconciliation package they’re using to address tax law, overhaul higher education aid and cut federal spending.

Speaker Mike Johnson, R-La., expects his chamber will vote on that legislation before the end of May, though Senate leaders haven’t put a timeline on when they’d bring the bill to the floor in that chamber.

GOP senators are likely to propose several amendments to the package, and any changes by the Senate would require the bill to get a final sign-off in the House before it could head to President Donald Trump’s desk.

The Treasury Department’s projection that a debt limit default will likely take place if no action is taken before August puts a firm deadline on when Republicans will need to reach final agreement.

Caution against waiting

Bessent also cautioned lawmakers against waiting until the last minute to get their work done.

“Prior episodes have shown that waiting until the last minute to suspend or increase the debt limit can have serious adverse consequences for financial markets, businesses, and the federal government, harm businesses and consumer confidence, and raise short-term borrowing costs for taxpayers,” he wrote. “A failure to suspend or increase the debt limit would wreak havoc on our financial system and diminish America’s security and global leadership position.”

A default on the country’s debt would limit the federal government to spending only the money it has on hand, likely leading to delayed, incomplete, or nonexistent payments on thousands of programs, including Social Security, Medicare, Medicaid, troop pay, veterans benefits and nutrition programs, among many others.

It would also lead to a downturn in the global economy with a recession being among the better scenarios.

A default is vastly different from a partial government shutdown and would lead to more significant consequences for federal spending and the economy. 

Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.

The post Treasury advises Congress must deal with debt limit before August or face default appeared first on kentuckylantern.com


Note: The following A.I. based commentary is not part of the original article, reproduced above, but is offered in the hopes that it will promote greater media literacy and critical thinking, by making any potential bias more visible to the reader –Staff Editor.

Political Bias Rating: Centrist

This article presents an objective and factual report about the Treasury Department’s warning regarding the U.S. debt limit, without an overt ideological perspective. It mainly reports on the Treasury’s communication to Congress, the timeline, and the consequences of not raising the debt limit in time. The article mentions various political figures, such as Republicans pushing for a reconciliation package and the involvement of Speaker Mike Johnson, but does not provide a biased slant on their actions or decisions. The focus remains on the Treasury’s projections and the factual consequences of a potential default, maintaining neutrality throughout.

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Senate votes 99-1 to remove AI moratorium from megabill

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3 hours ago

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July 1, 2025

By

kentuckylantern.com – Paige Gross – 2025-07-01 10:05:00


A moratorium on state-based AI laws was removed from the U.S. Senate’s “Big Beautiful Bill” by a 99-1 vote after growing opposition from lawmakers, states, and advocacy groups. Initially proposed by GOP Senators Ted Cruz and Marsha Blackburn as a 10-year ban, the moratorium aimed to centralize AI regulation federally. After debates and hearings, a scaled-back five-year ban with some exceptions was introduced but remained unpopular. The successful amendment to remove the moratorium, co-sponsored by Blackburn and Democrat Maria Cantwell, emphasized preserving state consumer protections while calling for a federal AI framework to ensure U.S. leadership and consumer safety.

by Paige Gross, Kentucky Lantern
July 1, 2025

A moratorium on state-based artificial intelligence laws was struck from the “Big Beautiful Bill” Monday night in a 99-1 vote in the U.S. Senate, after getting less and less popular with state and federal lawmakers, state officials and advocacy groups since it was introduced in May.

The moratorium had evolved in the seven weeks since it was introduced into the megabill. At an early May Senate Commerce Committee session, Sen. Ted Cruz of Texas said it was in his plans to create “a regulatory sandbox for AI” that would prevent state overregulation and promote the United States’ AI industry.

GOP senators initially proposed a 10-year ban on all state laws relating to artificial intelligence, saying the federal government should be the only legislative body to regulate the technology. Over several hearings, congressional members and expert witnesses debated the level of involvement the federal government should take in regulating AI. They discussed state’s rights, safety concerns for the technology and how other governmental bodies, like the European Union, are regulating AI.

Over the weekend, Sen. Marsha Blackburn of Tennessee and Cruz developed a pared down version of the moratorium that proposed a five-year ban, and made exceptions for some laws with specific aims such as protecting children or limiting deepfake technologies. Changes over the weekend also tied state’s ability to collect federal funding to expand broadband access to their willingness to nullify their existing AI laws.

Monday night, an amendment to remove the moratorium from the budget bill — cosponsored by Blackburn and Sen. Maria Cantwell, a Washington Democrat — was passed 99-1.

“The Senate came together tonight to say that we can’t just run over good state consumer protection laws,” Cantwell said in a statement. “States can fight robocalls, deepfakes and provide safe autonomous vehicle laws. This also allows us to work together nationally to provide a new federal framework on Artificial Intelligence that accelerates U.S. leadership in AI while still protecting consumers.” 

The “overwhelming” vote reflects how unpopular unregulated AI is among voters and legislators in both parties, said Alexandra Reeve Givens, president and CEO of the tech policy organization, Center for Democracy and Technology, in a statement.

“Americans deserve sensible guardrails as AI develops, and if Congress isn’t prepared to step up to the plate, it shouldn’t prevent states from addressing the challenge,” Reeve Givens said. “We hope that after such a resounding rebuke, Congressional leaders understand that it’s time for them to start treating AI harms with the seriousness they deserve.”

Kentucky Lantern is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kentucky Lantern maintains editorial independence. Contact Editor Jamie Lucke for questions: info@kentuckylantern.com.

The post Senate votes 99-1 to remove AI moratorium from megabill appeared first on kentuckylantern.com


Note: The following A.I. based commentary is not part of the original article, reproduced above, but is offered in the hopes that it will promote greater media literacy and critical thinking, by making any potential bias more visible to the reader –Staff Editor.

Political Bias Rating: Centrist

The content presents a balanced view of the debate over AI regulation, highlighting perspectives from both Republican and Democratic senators. It reflects bipartisan disagreements and cooperation on the issue without endorsing one side over the other. The article focuses on factual reporting of legislative actions, quoting representatives from both parties and experts, and avoids partisan language or framing, resulting in a centrist political bias.

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More downpours Tuesday, drier tomorrow

Published

9 hours ago

on

July 1, 2025

By

www.youtube.com – WLKY News Louisville – 2025-07-01 04:22:16

SUMMARY: Meteorologist Matt Milosevic reports that Tuesday started with tropical-style humidity fueling heavy downpours and some thunderstorms, mainly in western areas near Corydon and along Interstate 65 in southern Indiana. Rain chances are highest in the morning, tapering off by midday as the system moves east. The afternoon will see drier conditions and lower humidity, making temperatures near 80 degrees more comfortable. Overnight, skies will clear, and Wednesday will bring sunshine with lower humidity and highs in the upper 80s to low 90s. Humidity will rise again by the weekend, with highs near 95 and potential storms Sunday night into Monday.

WLKY Meteorologist Matt Milosevich has the latest on more rain and storm chances today, with drier and less humid weather ahead.

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Kentucky State Police takes to the skies in National Cruiser Contest

Published

1 day ago

on

June 30, 2025

By

www.wnky.com – WNKY Staff – 2025-06-30 12:49:00

SUMMARY: Kentucky State Police (KSP) has entered the 2025 Best Looking Cruiser Contest by the American Association of State Troopers, which lets the public vote for their favorite law enforcement cruiser photo. KSP’s entry features a 2024 Mustang GT, a 2024 Dodge Durango, and a Bell 407 helicopter, symbolizing their teamwork and tactical support from ground to sky. Governor Andy Beshear and KSP Commissioner Phillip Burnett, Jr. encourage Kentuckians to vote daily until July 11 to help KSP win again after placing in the top five for seven years and winning in 2021 and 2022. Voting is at surveymonkey.com.

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The post Kentucky State Police takes to the skies in National Cruiser Contest appeared first on www.wnky.com

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