Particle.news
Download on the App Store
7 ARTICLES
·
4w ago

U.S. Faces Potential Default as Debt Ceiling 'X-Date' Approaches Mid-July

Treasury's extraordinary measures buy time until late June, but partisan divisions in Congress hinder progress on raising the $36.1 trillion limit.

A pedestrain walks behind the security fencing which encircles the U.S. Capitol building in Washington, U.S., January 4, 2025. REUTERS/Fabrizio Bensch/File Photo
Image
Image

Overview

  • The Bipartisan Policy Center projects the 'X-Date' for a potential U.S. debt default to fall between mid-July and early October 2025, depending on tax revenue and Treasury cash flow management.
  • Treasury Secretary Scott Bessent has extended borrowing capacity using extraordinary measures, but these will likely be exhausted by June 27, intensifying the urgency for congressional action.
  • Failure to address the debt ceiling could lead to market volatility, increased borrowing costs, and diminished confidence in U.S. fiscal stability, according to economic experts.
  • Republicans are exploring budget reconciliation to address the debt ceiling and extend Trump-era tax cuts, but internal divisions within the party complicate these efforts.
  • The debt ceiling was last suspended in 2023 through a bipartisan agreement, delaying the risk of default until early 2025, but the current political landscape poses greater challenges to a timely resolution.