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The United States could default on $36.6 trillion in debt by August.
The Congressional Budget Office released a report Wednesday saying the federal government could run out of money as soon as August if lawmakers fail to raise or suspend the debt limit. The estimate matches the Bipartisan Policy Center’s of mid-July to early October.
"If the government’s borrowing needs are significantly greater than CBO projects, the Treasury’s resources could be exhausted in late May or sometime in June, before tax payments due in mid-June are received or before additional extraordinary measures become available on June 30," the report said.
Former director of the Congressional Budget Office Douglas and president of the American Action Forum Douglas Holtz-Eakin said we will find out rather quickly if those timelines are close.
"This is not something that we want to treat cavalierly," Holtz-Eakin said. "A default by the United States would be a cataclysm for the international financial system and no one thinks that's a good idea."
House Speaker Mike Johnson (R-LA) said recently that it looks like the House and Senate are moving closer to aligning on including a debt ceiling increase in their respective spending package proposals. Republicans have not yet agreed to or set a timeline on a joint budget resolution.
Holtz-Eakin said lawmakers need to get on the ball and agree to some legislation.
"We are a long way from voting yes or no on a reconciliation bill and if that's going to carry the debt limit, I'm concerned about the timetable," he said, suggesting that conversations should be struck up real soon on a debt limit bill.
Holt-Eakin added that cash flow from government's tax receipts will affect when the government risks going over its debt limit.