The U.S. could face an unprecedented default on its obligations as soon as early June if Congress does not act to lift the debt limit, a Washington think tank said Wednesday.
WASHINGTON — The U.S. could face an unprecedented default on its obligations as soon as early June if Congress does not act to The Bipartisan Policy Center, which forecasts the approximate “X-date” when the government will no longer be able to meet its financial obligations on time, said the U.S. will reach its statutory debt limit as soon as the summer or early fall of 2023. That inches up from the center’s previous prediction in that the “extraordinary measures” that U.S.
Previewing the data for reporters on a morning call, Shai Akabas, the center’s director of economic policy, said the new projections reflect “considerable uncertainty in our nation’s current economic outlook.” “Policymakers have an opportunity now to inject certainty into the U.S. and global economy by beginning, in earnest, bipartisan negotiations around our nation’s fiscal health and taking action to uphold the full faith and credit of the United States well before the X-Date,” he said. an extended pause on student loan repayments and high interest rates resulting in higher costs to service U.S. debt have contributed to moving up the X-date.
Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation’s $31.4 trillion borrowing authority or suspend the limit for a period of time. But she said it’s “critical that Congress act in a timely manner.” earlier this month to talk about the debt limit, but expectations are low for quick progress as GOP lawmakers push for steep spending cuts in exchange for a debt ceiling deal.
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