US projected to default this summer absent congressional action
The Congressional Budget Office warned on Wednesday that the government could run out of money to pay its bills as early as August or September if lawmakers fail to address the debt limit.
"The government's ability to borrow using extraordinary measures will probably be exhausted in August or September 2025," the nonpartisan CBO report predicted.
The CBO added that a precise projected X date is unclear because "the timing and amount of revenue collections and outlays over the intervening months could differ from the CBO's projections." The estimated projection provides Congress with a rough timeline to deal with the debt limit to avoid a default.
"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," it said in the report.
If lawmakers do not raise or suspend the debt limit before all extraordinary measures are exhausted, the government could default on its debt -- something that's only happened a handful of times in U.S. history, though never in regard to the statutory debt limit.
"The Treasury has already reached the current debt limit of $36.1 trillion, so it has no room to borrow under its standard operating procedures," according to the CBO report.
Treasury Secretary Scott Bessent told congressional leaders that his department would provide an estimate of how long extraordinary measures will last during the first half of May -- following tax season.
"I respectfully urge Congress to act promptly to protect the full faith and credit of the United States," Bessent wrote in a March 14 letter to Congress.
The issue has been on Congress' to-do list since last winter, when then-Treasury Secretary Janet Yellen warned the debt limit would be met around President Donald Trump's inauguration, which was on Jan. 20.
While Trump has called on House and Senate Republicans to abolish the debt limit, members of Congress are expected to include a provision in their budget reconciliation package to suspend the debt limit through the end of the Trump administration, though a plan is not finalized, including whether to offset any increase with spending cuts and reform.
