The U.S. government remains on a path for an early June default according to the nonpartisan Congressional Budget Office. (Credit: Toni Smith, USGS. Public domain
WASHINGTON — The federal government could default on its debt during the first two weeks of June without action on bipartisan legislation, according to the Congressional Budget Office.
The nonpartisan budget scorekeeper issued an updated report Friday, warning that “if the debt limit remains unchanged, there is a signific ant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.”
The projection lines up with an estimate from the Treasury Department, which says default could occur as soon as June 1, and the Bipartisan Policy Center, which projects a default window between early June and early August.
The Congressional Budget Office’s estimate adds more pressure on congressional leaders and President Joe Biden to broker a deal in the days ahead, in order to give the U.S. House and U.S. Senate time to debate and vote on the measure.
Biden and the four top congressional leaders met at the White House on Tuesday, though neither side reported significant progress following the meeting.
Staff and aides for the five have been meeting daily since, searching for a path forward.
Biden, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, Speaker Kevin McCarthy and House Minority Leader Hakeem Jeffries were supposed to get back together Friday, but the meeting was canceled.
Congress has just one week left this month in which both chambers are scheduled to be in Washington, D.C. Biden is set to leave next week for the G7 Summit in Hiroshima, Japan, beginning May 19.
CBO’s projections, included in the updated 10-year budget outlook, say that without changes to current law, the annual deficit will nearly double during the next 10 years to $2.7 trillion in 2033.
“As a result of those deficits, debt held by the public also increases in CBO’s projections, from 98 percent of GDP at the end of this year to 119 percent at the end of 2033,” CBO wrote. “At that time, debt measured as a share of GDP would reach the highest level ever recorded in the United States and would be on track to rise even further.”
CBO notes that debt held by the public would be $46.7 trillion at the end of 2033. That’s an increase from $24.3 trillion in debt held by the public at the end of 2022.
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