US faces default risk in August if debt limit isn’t raised, CBO estimates

On Wednesday, a non -party budget budget office (CBO) issued a projection that the United States government would need to raise the debt limit before this fall to avoid the failure to pay the country’s obligations.

The Central Bank of Oman estimated that the government’s ability to continue borrowing using the so -called unusual measures “is likely to be exhausted in August or September 2025”. There is uncertainty surrounding time when this will happen due to the potential differences in tax groups and government spending in that period.

The Central Bank of Oman indicated that if the government is forced to borrow more than expected significantly, unusual measures can be used in late May or in June before the tax payments due in mid -June are received or additional measures are available on June 30.

“If the debt limit is not raised or suspended, the Ministry of Treasury will not be allowed to issue additional debts other than the replacement of mature or recovered securities,” the Central Bank of Oman wrote regarding what can happen once unusual measures are used. “This restriction will eventually lead to delayed payments for some activities, or to fail to pay their obligations, or both. These measures may lead to distress in credit markets, disturbances in economic activity, and rapid increases in borrowing rates of the treasury.”

The financial strength of the United States government is deteriorating, Moody’s warning

congress Dome"/>

The total national debt exceeds 36 trillion dollars. (Samuel Corome/Getty Emoz/File)

The uncertainty surrounding the time of “History of X” comes to exhaust unusual measures at a time when the congressmen not only deal with annual spending bills, but also deal with the Republicans ’push to expand taxes for 2017 through the reconciliation process.

Akabas, the Vice President of the Policy Center for the Policy Center (BPC), told the BPC, Fox Business in an interview that although Congress removes several aspects of fiscal policy, it must give priority to extending or suspending the debt limit due to the potential impact on the economy.

“This must rise to the top of the priority list because it is the only element that can have the greatest impact on the economy if the debt limit is not extended in time.” “I expect and I hope that political makers will focus directly on this with the passage of the coming weeks, in addition to all the other important elements on their agenda.”

On Monday, BPC released its X Date analysis, which was found to be between mid -July and early October, except for Congress.

The federal deficit in the budget recorded 1.1 USD in the first 5 months of the fiscal year

Aquabas noted that there is an additional lack of sure about the history of X in the debt -limiting epic of this year due to the Trump administration tariff plans, which are “expected to achieve some additional revenues” that “may actually be achieved”, although delay and changes in implementation can affect this.

“This is one of the components of the customs tariff equation. The other is that it can have effects in the opposite direction to create some of the economic uncertainty that has been widely discussed and prevent employment decisions that may achieve additional revenues to the government, and may also lead to additional support payments to the affected parties such as farmers,” he said.

He added that disaster relief is also an important variable that causes uncertainty given that Congress will enact a draft spending law to finance relief efforts from agencies, while taxpayers affected also have extensions to deposit taxes that will affect the timing of tax receipts in the federal government.

The new budget expectations in the debt record are found in 4 years: CBO

With the presence of Congress around the clock to address the debt limit amid other financial policy discussions, the implications of failure to act also should also stimulate legislators to ensure timely measures.

“If Congress fails to address the debt limit on time, the effects may be widespread and severe in a way that every American family and business feels, and affects our economic horizons in the future,” Akabas explained. “We do not know that since it will be unprecedented to meet all our obligations, but if we are not, this may lead to the interaction of the markets strongly, this may lead to high interest rates, as this may lead to a full range of other results that we cannot necessarily predict.”

Akabas added that the debt limit also serves “as a reminder of the basic financial challenge that we did not damage our arms around us and we continued to kick the box on the road to the difficult decisions necessary on both spending and the tax side. All the budget is an exercise in the barters, and recently Congress was not fully prepared to take these difficult calls.”

Get Fox Business on the Go by clicking here

He added: “The public, I think, needs to understand that we need to address the limit of debt itself and make sure that we are facing our obligations, but it is also a reminder that we need to work Congress in a way of two parties to address the basic debt that leads to an increase in the need for debt.”