The treasure burned $ 286 billion in its cash balance in the last month

The US Treasury Department has burned money at a historic pace in the last month – an alarming signal that could force legislators to intervene to prevent the country of default on national debt.

The agency, now managed by the former hedge fund manager, Scott Bessent, burned $ 286 billion in March only.

It is the biggest draw in American history, and it is not competed by the Treasury that the Treasury spent 279 billion dollars in August 2021 at the height of the pandemic.

The General Treasury Account (TGA), essentially the US government’s current account, only $ 280 billion remains for funds disbursed for social security checks, government wages and other crucial programs of the millions of Americans on which count.

The last time the treasury chests decreased this weak was in 2023 when the United States violated the debt ceiling, a legal limit fixed by the congress on the amount of the government to pay its bills.

In May of the same year, the TGA, which was managed by the Federal Reserve, fell to only $ 37 billion.

This prompted the president of the time, Joe Biden, and the president of the house at the time, Kevin McCarthy, to conclude an agreement suspended the limit of debt.

The government carried out a new debt in the form of bonds and in October 2023, the TGA climbed up to more than $ 800 billion. He stayed around this amount, give or take $ 100 billion for the rest of Biden’s mandate.

On January 21, 2025, the day after Trump’s prosecution, the treasure was still red with $ 704 billion. The account balance dropped by 60% unprecedented in just three months.

The current crisis occurred because the same Biden-McCarthy agreement from 2023 made a debt ceiling of 36.1 billions of dollars would be restored on January 2, 2025.

Since the American national debt is currently 36.6 billions of dollars, higher than the limit, the government was forced to shoot the species still available on the Treasury account.

In addition, since January 2, the Treasury has used temporary accounting tips nicknamed “extraordinary measures”, which allows the government to continue to borrow to finance operations.

These measures cannot avoid a defect in the national debt until August or September, according to a March report of the Congressional Budget Office.

Bessent wrote to the president of the Mike Johnson room in mid-March that he will give an update on the duration of the temporary loan after the government collects taxes next month.

The consequences of a defect-that is to say that the country is lacking in money to pay its bills-would be “catastrophic” for the United States and the world economy, said the former secretary of the Treasury, Janet Yellen.

The stock market would almost certainly block in such a scenario, investors around the world understanding that the United States – considered the most stable government in the world – could not fulfill its financial obligations for the first time in almost 250 years of existence.

Retirement accounts and university savings accounts for millions of Americans would plunge even more than they have already done since Trump took office.

Depending on the duration of a potential defect, the United States could even slip into a recession.

A defect would also mean higher interest rates at a time when they are already raised compared to the pre-Cuvid era. Americans should get rid of much more to qualify for mortgages and car loans.

In the light of these dark realities, the politicians of the two parties have always been eager to avoid defect in national debt and historically concluded 11th hour agreements on the issue.

The consensus is developing among the Republicans, who control the White House and the Congress, that the only way to warn this is to note the debt ceiling again and to allow the government to accumulate even more to its 36.6 billions of dollars of liabilities.

The head of the majority of the Senate, John Thune, would be open up the debt limit of 4 billions of dollars in an upcoming expenses, whose details are still debated in the House and the Senate.

The chamber’s budgetary plan contains 4.5 billions of dollars in tax discounts that Trump is impatient to pass, while the Senate version is not due to the procedural constraints that republican members are currently working to bypass.

Once the Chamber and the Senate agree on a framework, the complications could arrive when the massive bill is voted, because a dozen Senators of the GOP and 49 Republicans of the Chamber never voted for an increase in the ceiling of the debt, reported NBC News.

Trump has always supported the increase in the debt limit, which could open the way to a force test between him and the tax hawks of his party.

Senator Rand Paul does not support the debt limit, telling Punchbowl News last week “there will be other preservatives they will lose”.

While negotiations continue, the fact remains that the treasure only remains $ 280 billion to write, which is dangerously low given the amount that the government spends monthly.

For example, 1.5 billion of dollars was spent on Social Security last year, which reached an average of $ 125 billion per month. This alone would eat 44% of the General Treasury account.

When you add expenses to other non -discrient budgetary elements, which means that they are compulsory and not subject to an annual examination by the congress, the image becomes even more disastrous.

The largest categories of compulsory expenditure include the defense budget, Medicare, Medicaid, the health insurance program for children and subsidies to the affordable care law.

In 2024, the government spent 2.57 billions of combined dollars – about $ 214 billion per month – on all these things.

Social security, health care and military spending alone would cause a deficit of $ 59 billion if the treasury was not authorized to borrow money to cover it.