The U.S. government will begin defaulting on its payment obligations between early June and early August without an increase in the federal debt limit, the Bipartisan Policy Center said on Tuesday, flagging pressure from a drop in tax revenue.
The front end of the centrist think tank's latest estimate for the so-called "X-date" - when the government runs short of cash to pay its obligations - lines up with that of U.S. Treasury Secretary Janet Yellen,The Bipartisan Policy Center , which closely monitors debt limit disputes in Congress, had estimated in February the X-date could come between summer and early fall, but now sees a default hitting much earlier if Congress fails to raise the $31.4 trillion U.S. borrowing cap.
"The coming weeks are critical for assessing the strength of government cash flows," Shai Akabas, BPC director of economic policy said in a statement. "If a solution is not reached before June, policymakers may be playing daily Russian Roulette with the full faith and credit of the United States, risking financial disaster for their constituents and the country."
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