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4w ago

U.S. Faces Debt Default Risk as Early as August, CBO Warns

Treasury's extraordinary measures may be exhausted by late May or June, intensifying pressure on Congress to resolve debt ceiling deadlock.

A man walks toward the Capitol on a day where a potential government shutdown looms during the holidays after a spending bill backed by Donald Trump failed in the U.S. House of Representatives, on Capitol Hill in Washington, U.S., December 20, 2024. REUTERS/Kevin Lamarque/File Photo
Scott Bessent, United States Secretary of the Treasury, speaks at an Economic Club of New York luncheon in New York, Thursday, March 6, 2025. (AP Photo/Seth Wenig)
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Overview

  • The Congressional Budget Office estimates the U.S. could default on its debt as early as August 2025 without congressional action.
  • Treasury Department's extraordinary measures to delay default may run out by late May or June if borrowing needs exceed projections.
  • The national debt currently exceeds $36 trillion, highlighting the scale of the fiscal challenge.
  • Congress remains divided, with the House proposing a $4 trillion debt ceiling increase and the Senate pursuing a budget measure without such an increase.
  • The Treasury Department is expected to release an updated 'X-date' projection in the coming weeks to clarify the timeline for potential default.