The US Treasury Department has burned through cash at a historic rate in the last month – an alarming signal that may require lawmakers to intervene to prevent the country from defaulting on the national debt.

The agency, now led by former hedge fund manager Scott Bessent, has burned through $286 billion in the month of March alone.

This is the largest single-month drawdown in American history, and it’s only rivaled by the Treasury spending $279 billion in August 2021 during the height of the pandemic. 

The Treasury General Account (TGA), essentially the US government’s checking account, now has just $280 billion left for disbursing funds for Social Security checks, government salaries and other crucial programs millions of Americans rely on.

The last time the Treasury’s coffers dwindled this low was in 2023 when the US breached the debt ceiling, a legal limit set by Congress on how much the government can borrow to pay its bills.   

By May of that year, the TGA, which is managed by the Federal Reserve, was down to just $37 billion. 

This prompted then-President Joe Biden and then-House Speaker Kevin McCarthy to strike a deal suspending the debt limit. 

The government proceeded to issue new debt in the form of bonds and by October 2023, the TGA soared back up to more than $800 billion. It stayed at around that amount give or take $100 billion for the rest of Biden’s term.

On January 21, 2025, the day after Trump was sworn in, the Treasury was still flush with $704 billion. The account balance has fallen by an unprecedented 60 percent in just three months.

Treasury Secretary Scott Bessent (pictured outside the White House) warned House Republicans in March that the Treasury General Account’s balance is dwindling

This chart shows the cash balance in the Treasury General Account from April 2022 to March 2025. The lowest the balance ever sank was $37 billion in May 2023

The current crisis has occurred because that same Biden-McCarthy deal from 2023 made it so a debt ceiling of $36.1 trillion would be reinstated on January 2, 2025.

Since the US national debt is currently at $36.6 trillion, higher than the limit, the government has been forced to draw down on the cash still available in the Treasury’s account.

Additionally, since January 2, the Treasury has been using temporary accounting tricks dubbed ‘extraordinary measures,’ which allows the government to continue borrowing to finance operations.

These measures will only be able to stave off a default on the national debt until August or September, according to a March report from the Congressional Budget Office.

Bessent wrote to Speaker of the House Mike Johnson in mid-March that he will be giving an update on how long the temporary borrowing can last after the government collects taxes next month.

The consequences of a default – i.e. the country running out of money to pay its bills – would be ‘catastrophic’ for the US and the global economy, former Treasury Secretary Janet Yellen has said.

The stock market would almost certainly crash in such a scenario, with investors around the world coming to the understanding that the US – thought to be the most stable government in the world – could not fulfill its financial obligations for the first time in its nearly 250 years of existence.

The retirement accounts and college savings accounts for millions of Americans would plunge even further than they already have since Trump took office.

Senate Majority Leader John Thune and Speaker of the House Mike Johnson are beginning to come to an agreement on how Republicans should move forward on the impending debt ceiling crisis

Depending on how long a potential default lasts, the US could even slip into a recession.

A default would also mean higher interest rates at a time when they are already elevated compared to the pre-COVID era. Americans would have to fork over a lot more to qualify for mortgages and auto loans.

In light of these grim realities, politicians of both parties have always been eager to avoid defaulting on the national debt and have historically come to 11th-hour agreements on the issue. 

Consensus is growing among Republicans, who control the White House and Congress, that the only way to forestall this is to raise the debt ceiling once again and allow the government to pile on even more to its $36.6 trillion in liabilities.

Senate Majority Leader John Thune is reportedly open to raising the debt limit by $4 trillion in an upcoming spending package, the details of which are still being debated in the House and Senate.

The House’s budget plan contains $4.5 trillion in tax cuts that Trump is eager to pass, while the Senate’s version does not due to procedural constraints Republican members are currently working to circumvent.

Once the House and Senate do agree on a framework, complications could arrive when the massive bill comes up for a vote, since a dozen GOP senators and 49 House Republicans have never voted for a debt ceiling increase, NBC News reported.

Trump has always supported raising the debt limit, which could set the stage for a showdown between him and the fiscal hawks of his party.

Trump has always been for raising the debt limit, something GOP fiscal hawks do not agree with him on. Senator Rand Paul is among the most outspoken in that group

Senator Rand Paul doesn’t support raising the debt limit, telling Punchbowl News last week ‘there will be other conservatives who they will lose.’

As negotiations continue, the fact remains that the Treasury has only $280 billion left to draw down on, which is dangerously low considering how much money the government spends on a monthly basis.

For example, $1.5 trillion was spent on Social Security last year, which averages out to $125 billion per month. That alone would eat up 44 percent of the Treasury General Account.

When you add up spending on other non-discretionary budget items, meaning they are mandatory and not subject to annual review by Congress, the picture becomes even more dire.

The biggest categories of mandatory spending include the defense budget, Medicare, Medicaid, the Children’s Health Insurance Program, and Affordable Care Act subsidies.

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

Social Security, healthcare and military spending alone would lead to a $59 billion shortfall if the Treasury wasn’t allowed to borrow money to cover it.