U.S. could face default by August if Congress doesn’t address debt ceiling, budget office says

The federal government is facing a looming financial crisis, with the Congressional Budget Office estimating that it could run out of borrowing power as early as August if Congress fails to take action. This dire situation, known as the “X-date,” would result in the government being unable to pay its bills and potentially defaulting on its obligations.

The debt ceiling, which limits how much the Treasury can borrow to meet the government’s financial obligations, was last addressed in 2023 when Congress suspended it until January 1, 2025. Since then, the Treasury Department has been utilizing extraordinary measures to delay a default and keep the government running. However, these measures are only temporary solutions, and without a resolution from Congress, the government could face a financial crisis in the coming months.

The current national debt stands at over $36 trillion, highlighting the urgent need for Congress to address the debt limit issue. The Bipartisan Policy Center projected that the U.S. could default on its debt between July and October without intervention from lawmakers. The Treasury Department is expected to release its own projected X-date in the near future, further underscoring the need for immediate action.

In response to the impending crisis, congressional leaders have been exploring different approaches to raise the debt ceiling. The House included a provision in its budget proposal to raise the debt ceiling by $4 trillion, aligning with President Trump’s agenda. However, the Senate has been pursuing a different budget measure that does not include a debt limit increase. As lawmakers work to reconcile these differences, the fate of the government’s financial stability hangs in the balance.

House Speaker Mike Johnson and Senate Majority Leader John Thune have been meeting with top tax leaders to find a unified plan moving forward. Thune expressed optimism that lawmakers will be able to address the debt limit as part of the budget process, signaling a potential breakthrough in the ongoing negotiations.

With the clock ticking and the financial future of the country at stake, it is crucial for Congress to come together and find a solution to raise the debt ceiling before it’s too late. Failure to act could have catastrophic consequences for the economy and the American people. It’s time for lawmakers to put aside their differences and prioritize the financial stability of the nation.