By David Lawder and Richard Cowan
WASHINGTON, Feb 15 (Reuters) – The Congressional Budget Office said on Wednesday the U.S. Treasury Department would exhaust its ability to pay all of its bills between July and September unless the budget was increased or suspended at the current limit. $31.4 trillion in debt.
In a three-page report, the nonpartisan CBO warned that a historic default on federal debt could occur before July if revenues flow to the Treasury in April, when most Americans typically file annual income taxes. , are below expectations.
The pace of incoming revenue, coupled with the performance of the country’s economy in the coming months, makes it difficult for government officials to predict the exact “X date”, when the Treasury could start defaulting on many payments. of debt without congressional action.
“If the debt ceiling is not raised or suspended before the extraordinary measures are exhausted, the government will not be able to pay its obligations in full,” the CBO report said. “As a result, the government would have to delay payments for certain activities, default on its debts, or both.”
In a separate budget and economic outlook, the CBO said annual federal budget deficits will average $2 trillion between 2024 and 2033.
The report provided a sobering account of Washington’s significant spending in recent years on COVID pandemic relief, infrastructure improvements, climate change mitigation measures and other actions.
This will no doubt fuel Republican accusations that Joe Biden’s government spending needs to be brought under control, though the need to raise the debt ceiling is the result of previously enacted spending and tax cuts, some under the predecessor. Republican from Democrat Biden, Donald Trump. .
Republicans, who control the House of Representatives, want to hold off on a debt ceiling increase until Democrats first agree to major spending cuts. Democrats, in turn, say the debt limit should not be “hostage” to Republican tactics on federal spending.
After hitting the $31.4 trillion borrowing limit on Jan. 19, Treasury Secretary Janet Yellen said the Treasury could keep debt payments, federal benefits and other spending at least until June 5, using cash inflows and extraordinary cash management measures. (Reporting by David Lawder and Richard Cowan; Additional reporting by Jason Lange. Editing in Spanish by Manuel Farías)