US Risks Debt Default By August Without Congress Action

Congressional Budget Office Warns of Possible Default

The U.S. government may face the risk of defaulting on its massive $36.6 trillion debt as early as August if Congress does not act to raise the debt ceiling. This warning comes from the non-partisan Congressional Budget Office (CBO), which released its latest forecast on Wednesday.

Estimated Timeline for Default Risk

According to the CBO, the “X-date”—the point at which the Treasury Department will no longer be able to meet its financial obligations—will likely occur between August and September. This estimate aligns with a recent analysis by the Bipartisan Policy Center, which suggested that default risks could arise between mid-July and early October.

Congress Yet to Act on Debt Limit Increase

Despite the urgency, Republican lawmakers, who control both the House of Representatives and the Senate, have not announced when they plan to introduce legislation to increase the debt ceiling. The U.S. has faced similar situations in the past, with Congress delaying action until the last minute.

Market Uncertainty and Credit Rating Risks

Delays in raising the borrowing limit have historically caused uncertainty in financial markets and led to credit rating downgrades for the U.S. government. Investors and economists are closely watching the situation, as failure to raise the debt ceiling could have significant economic consequences.

Conclusion

With time running out, the U.S. faces a critical financial challenge. If Congress does not act soon, the country could default on its debt, leading to severe economic and market disruptions. The coming months will be crucial in determining how lawmakers handle this pressing issue.