President Donald Trump's Treasury secretary, Steven Mnuchin, is offering a dire warning about the federal government's financial health if Congress doesn't raise the debt ceiling before the August recess.
"We've run lots of models and there are lots of different assumptions. I am comfortable saying we can fund the government through the beginning of September," Mnuchin said, according to The Washington Post.
He said that he "can't imagine" that the U.S. would hit the debt ceiling, "but it would obviously create significant market disruption."
Mnuchin also told a panel in the House of Representatives that he had a "backup plan" if Congress doesn't raise the debt ceiling before the August recess, although he also noted that "however, markets don’t want us to wait."
The treasury secretary also suggested that, in order to avoid potential market disruptions, the Congress should schedule it so that votes on raising the debt ceiling are linked to important budget and spending votes.
"My suggestion at some point going forward is that Congress considers changing the timing so that the debt ceiling matches the budget process so we don’t have to deal with this in this format," Mnuchin said.
In addition to advocating that Congress raise the debt ceiling, Mnuchin also made headlines this week for proposing that the Dodd-Frank Act, which regulates financial institutions, be weakened. A report ordered by President Trump argued that "a sensible rebalancing of regulatory principles is warranted in light of the significant improvement in the strength of the financial system and the economy, as well as the benefit of perspective since the Great Recession."
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