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The Congressional Budget Office (CBO) has stressed that \u201cthere is a significant risk that the Treasury will run out of funds at some point in the first two weeks of June\u201d if the debt ceiling is not raised or suspended. The CBO\u2019s projection is in line with the estimate by the Treasury Department that a U.S. default could occur on June 1.<\/strong><\/p>\n The Congressional Budget Office (CBO) released an update to the Budget Outlook for 2023 to 2033 Friday. The report updates CBO\u2019s budget projections released in February.<\/p>\n \u201cCBO\u2019s baseline projections are developed in accordance with procedures set in law. Those procedures require the agency to project spending, revenues, deficits, and debt without regard to the statutory limit on the issuance of new federal debt. That limit (now set at $31.4 trillion) was reached on January 19, 2023,\u201d the report details, adding:<\/p>\n CBO estimates that if the limit is not raised or suspended, there is a significant risk that the Treasury will run out of funds at some point in the first two weeks of June.<\/p>\n<\/blockquote>\n The CBO\u2019s estimate aligns with that of U.S. Treasury Secretary Janet Yellen, who said<\/a> earlier this month that the Treasury may not be able to pay all of the government\u2019s bills as early as June 1 \u201cif Congress does not raise or suspend the debt limit before that time.\u201d<\/p>\n Many people have warned about the implications of the U.S. defaulting on its debt obligations. The International Monetary Fund<\/a> (IMF) said there would be \u201cvery serious repercussions.\u201d Federal Reserve Chair Jerome Powell<\/a> warned of \u201cuncertain and adverse\u201d consequences. The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler<\/a>, expects \u201csignificant\u201d and \u201clasting effects\u201d on investors, issuers, and markets. Goldman Sachs<\/a> believes the consequences will be \u201ccatastrophic.\u201d<\/p>\n Meanwhile, former President and 2024 presidential candidate Donald Trump<\/a> has urged Republican lawmakers to let the U.S. default on its debt if the Democrats do not agree to spending cuts. \u201cIt\u2019s better than what we\u2019re doing right now because we\u2019re spending money like drunken sailors,\u201d he said.<\/p>\nCBO Sees \u2018Significant Risk\u2019 of the U.S. Defaulting in June<\/h2>\n
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