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Business & Economy

Business & Economy

The Big Story

US could default on its debt by August: analysis

The federal government risks defaulting on its debt sometime this summer or early fall without action to address its debt ceiling, according to the Bipartisan Policy Center (BPC).

© AP

BPC projected the “X-date” will “most likely occur between August 15 and October 3” if Congress fails to act.

“Congress must address the debt limit ahead of the August recess,” said Margaret Spellings, president and CEO of the Bipartisan Policy Center, in a Wednesday statement. “With so many Americans worried about their own budgets and the state of the economy, Congress can’t afford to inject any additional uncertainty into the mix.”

“They need to act soon to prioritize our nation’s financial stability and reassure global markets that we take this responsibility seriously,” Spellings added.

While it’s difficult to pinpoint a hard X-date, projections become more precise the closer the government arrives to running out of cash.

The debt limit, which caps how much money the Treasury Department can owe to pay the country’s bills, was last suspended in 2023 as part of a bipartisan deal that staved off the threat of national default through early 2025.

The national debt stands at more than $36 trillion.

The Treasury Department has been implementing “extraordinary measures” to buy time for Congress to address the debt ceiling.

Aris Folley has more here.

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