The United States could be in default as early as July if the debt ceiling is not raised, the Congressional Budget Office (CBO) warned on Wednesday in its latest forecast.
Released alongside the agency’s outlook for the federal deficit and the economy over the next 10 years, the nonpartisan body’s assessment comes as the standoff continues between the White House and the dominating Republican opposition. representatives room.
Faced with the threat of a default, a scenario that would endanger the American and international economy, the Biden administration has planned “extraordinary measures” to prevent an overrun of the maximum amount of indebtedness of the federal government.
The Treasury Department estimated that these extraordinary measures would be exhausted by June.
According to the CBO, the government risks defaulting between July and September if Congress fails to raise the debt ceiling, warning of dire economic consequences. “If the debt ceiling is not raised or suspended before the exhaustion of the extraordinary measures, the government will not be able to pay its obligations in full,” the agency said in a statement. The debt ceiling is the maximum amount of indebtedness of the United States, without which the country would be unable to honor its payments to its creditors and would have to reduce its expenditure.
“As a result, the government should delay payments for certain activities, default on its debts, or both,” the same agency warned.
With MAP