US could default on debt as soon as July: Analysis
The federal government could default on its debt as soon as July, a new forecast from the Bipartisan Policy Center warns, raising pressure on Congress for action.
The prominent think tank forecast Monday that the so-called “X-Date” would likely arrive between mid-July and early October.
“Fiscal responsibility is not just about avoiding financial calamity time and time again—it’s about ensuring economic stability and paying our bills on time,” Margaret Spellings, president and CEO of the think tank, said in a statement.
“This year presents many opportunities to begin getting our fiscal house in order without risking the full faith and credit of the United States. Policymakers must commit to responsible budgeting, which starts with avoiding debt limit brinksmanship and its impacts on our economy.”
While it’s difficult to pinpoint a hard X-Date, projections become more precise the closer the government arrives to running out of cash. The think tank said Monday that tax revenues will also be a key factor in the timeline.
The debt limit was last suspended by Congress as part of a bipartisan bill struck between former President Biden and GOP leadership in 2023, staving off the threat of national default through early 2025.
However, Treasury Department Secretary Janet Yellen said in January that the government would have to implement “extraordinary measures” after the government was expected to reach the new limit later that month.
The debt caps how much money the Treasury can owe to pay the country’s bills.
President Trump had pushed the prior Congress to pass legislation to address the debt ceiling in December, as Republicans have warned Democrats could use the leverage point to demand major concessions.
When Republicans led the House in the last Congress, they also used the debt ceiling to get a Democratic-led Senate and Democratic president to come to the negotiating table for a budget caps deal.
Republicans have ambitious hopes of using a special maneuver known as budget reconciliation to handle the debt ceiling, along with extending Trump’s signature tax cuts set to expire this year, without Democratic support.
But the debt ceiling timeline could complicate those plans, particularly as some Republicans warn the agenda could face delays because of internal GOP divisions.
Topics
-
U.S. Could Run Out of Cash by July, Analysis Finds
The Bipartisan Policy Center estimates that the so-called X-date could fall between mid-July and early October if Congress does not lift or suspend the nation’s debt limit.The New York Times - 2d -
Wyden: Democrats shouldn't make Republicans job ‘any easier’ by helping them raise debt limit
Sen. Ron Wyden (R-Ore.) on Monday said Democrats shouldn’t help Republicans tackle the debt ceiling this Congress, after a recent forecast warned the government was at risk of defaulting during the ...The Hill - 1d -
Trump policies 'promise' an economic downturn, says prominent forecaster in first-ever 'recession watch'
The UCLA Anderson Forecast, citing substantial changes to the economy from policies of the Trump administration, issued its first-ever "recession watch" on Tuesday.CNBC - 6d -
Debt limit time crunch could test both parties
House Democrats are sending an early warning shot as the government’s borrowing window inches to a close: winning Democratic support for a debt-ceiling hike will come at a cost for Republicans. The ...The Hill - 3h -
Senate Republicans push Trump for debt ceiling plan
The Louisiana senator has been tapped to consult with the president on a strategy for avoiding a federal default.Politico - Mar. 11 -
Moody’s warns on deteriorating outlook for US public finances
Rating agency says Donald Trump’s policies could make it more difficult to offset rising deficit and debtFinancial Times - 20h -
Ray Dalio warns that mounting U.S. debt problems could lead to ‘shocking developments'
Bridgewater founder Ray Dalio on Wednesday warned that a "very severe" supply-demand problem regarding U.S. debt could lead to shocking developments.CNBC - Mar. 12 -
2-year Treasury leads yields lower as Fed sticks with 2025-27 rate-cut forecast
U.S. government debt rallied on Wednesday, sending the policy-sensitive 2-year yield down by the most in more than a week, after Federal Reserve officials stuck with their expectations for ...MarketWatch - 6d -
UBS lifts gold price forecast after metal tops $3,000
UBS’s chief investment office has lifted its gold price forecast to $3,200 from $3,000, saying it could reach that threshold by June.MarketWatch - Mar. 17
More from The Hill
-
Trump could be pushing South Africa closer to China
On Feb. 7, Trump issued the executive order “Addressing Egregious Actions of the Republic of South Africa.”The Hill - 54m -
Congress continues to seek answers on UFOs
UFO whistleblower David Grusch will be advising Missouri Rep. Eric Burlison on the issue.The Hill - 1h -
'Like a forest fire': Where large measles outbreaks will occur, according to an epidemiologist
"What is interesting about this current outbreak is the speed at which it's expanding and increasing," said Dr. William Moss, an epidemiology professor at the Johns Hopkins Bloomberg School of ...The Hill - 1h -
Study links Wegovy to increased hair loss risk
Researchers assessed data from 16 million patients from 2006 to 2020 taking semaglutide-based drugs; the active ingredient in Wegovy.The Hill - 1h -
How Trump is finding workarounds to legal hurdles
There’s a theme emerging in the Trump administration’s battles in courtrooms across the country contesting an array of executive actions facing litigation. As the saying goes, if you can’t go ...The Hill - 1h
More in Politics
-
Trump signs order requiring proof of citizenship to register to vote
President Donald Trump signed a sweeping executive order on Tuesday that would require people to prove their citizenship when they register to vote by providing a United States passport or another ...NBC News - 40m -
Trump could be pushing South Africa closer to China
On Feb. 7, Trump issued the executive order “Addressing Egregious Actions of the Republic of South Africa.”The Hill - 54m -
Congress continues to seek answers on UFOs
UFO whistleblower David Grusch will be advising Missouri Rep. Eric Burlison on the issue.The Hill - 1h -
'Like a forest fire': Where large measles outbreaks will occur, according to an epidemiologist
"What is interesting about this current outbreak is the speed at which it's expanding and increasing," said Dr. William Moss, an epidemiology professor at the Johns Hopkins Bloomberg School of ...The Hill - 1h -
Study links Wegovy to increased hair loss risk
Researchers assessed data from 16 million patients from 2006 to 2020 taking semaglutide-based drugs; the active ingredient in Wegovy.The Hill - 1h