March 27 (UPI) — If Congress does not raise the debt ceiling, the United States is expected to default on its bills in either August or September, the Congressional Budget Office warned.
The latest projection by the CBO was announced Wednesday. However, it explained that if the government’s borrowing needs are “significantly greater” than the nonpartisan agency expects, it could run out of money as soon as May or June, before tax payments are due and additional so-called extraordinary measures become available to the Treasury to make more cash available.
“If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government will be unable to pay all of its obligations,” the CBO said in a statement. “As a result, it would have to delay making payments for some activities, default on its debt obligations, or both.”
Being able to accurately predict the so-called X-date is “uncertain,” it said, explaining that the timing and amount of tax revenue to be collected later this spring as well as expenditures could be different from its projections.
On the other hand, if the government’s borrowing needs fall below the CBO’s expectation, the Treasury will be able to continue to pay the United States’ bills for longer than it anticipates.
The United States’ current debt stands at about $36.2 trillion, according to Treasury data. In June, lawmakers suspended the debt limit, also known as the debt ceiling, through Jan. 1. The following day, the $36.1 trillion limit was reinstated, which was the amount outstanding at that time.
Since Jan. 21, the government has used “extraordinary measures,” such as pausing Civil Service Retirement and Disability Fund investments and the Postal Service Retiree Health Benefits Fund, to free up space for additional borrowing without breaching the ceiling.
