The independent Bipartisan Policy Center on Tuesday projected the nation’s debt ceiling crisis hitting as early as June 2 and as late as August.
The big gap is dependent on tax income to Treasury, the think tank said.
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“Absent congressional action, BPC projects that the ‘X Date’ — the date when the federal government will be unable to pay all of its bills in full and on time — is most likely to occur between early June and early August of 2023, with an elevated risk between June 2 and June 13,” BPC said in a just-released report shared with Secrets.
Treasury Secretary Janet Yellen has been pushing hard for Congress to consider June 1 as the drop-dead date in hopes Republicans cave into President Joe Biden’s demands that they will OK an increase in the borrowing ceiling without spending cuts.
Other influencers, notably Goldman Sachs, have said the United States won’t go into default until June 8-9.
Biden met with House Speaker Kevin McCarthy (R-CA) last night in a restart of negotiations, and the top Republican sounded hopeful, though no deal is in sight.
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BPC raised concerns that if the talks linger, there won’t be enough time to work out the details of a vote to raise the borrowing ceiling by early June.
“Come early June, Treasury will be skating on very thin ice that will only get thinner with each passing day,” said Shai Akabas, executive director of BPC’s Economic Policy Program. “Of course, the problem with skating on thin ice is that sometimes you fall through,” said Akabas.
The 68-page report is below.
