The Congressional Budget Office said that the so-called X-date could occur as early as spring if Congress does not lift or suspend the nation’s debt limit.
The U.S. could run out of money to pay its bills by late May if Congress does not raise or suspend the nation’s debt limit, the Congressional Budget Office said on Wednesday.
The forecast puts added pressure on Congress and the Trump administration to address the borrowing cap, which restricts the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations. A protracted standoff later this year could rattle markets and complicate President Trump’s plans to enact more tax cuts.
The C.B.O. noted that its forecast is subject to uncertainty over how much tax revenue the federal government will collect this year. It expects that the United States will have sufficient funds to keep paying bills through August or September. However, it said that if borrowing needs exceed its projections, the U.S. could run out of cash by late May or sometime in June.
“The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from C.B.O.’s projections,” the budget office said in a report.
The so-called X-date is the moment when the United States is unable to pay its bills, including interest payments to investors who hold government debt. Failure to meet those obligations could result in the United States defaulting on its debt. The U.S. has never defaulted on its debt, which is considered one of the safest investments in the world, and brinkmanship over missed payments could be economically damaging.
The national debt is now approaching $37 trillion. Lawmakers agreed in June 2023 to suspend the $31.4 trillion debt limit until Jan. 1, 2025.