CBO Report Warns Congress to Address Debt Limit Before Government Runs Out of Funds

The Congressional Budget Office (CBO) released a report on Wednesday that estimates the United States government has enough money to keep paying its bills until at least July, and potentially longer. The report states that the Treasury Department has been taking “extraordinary measures” since the U.S. hit the statutory debt ceiling in January, and that if Congress doesn’t address the debt limit before then, the federal government will be unable to fully pay its obligations sometime between July and September.

The CBO’s report warns that if income tax receipts in April come in lower than expected due to last year’s stock market downturn, the extraordinary measures may be exhausted sooner, and the government could run out of funds before July. Treasury Secretary Janet Yellen has said that a default would be economically calamitous.

The CBO’s report comes as Congress is debating President Joe Biden’s $2 trillion infrastructure plan, which would be funded in part by raising taxes on corporations and the wealthy. The plan is expected to be paid for over 15 years, and would require Congress to raise the debt ceiling.

The report also notes that the government’s spending has increased due to the coronavirus pandemic, with the deficit for the 2021 fiscal year projected to be $3.3 trillion. This is the largest deficit since 1945, and is more than double the deficit for the 2020 fiscal year.

The CBO’s report is yet another warning to Congress to address the debt limit before the government runs out of funds. Without action, the government could be unable to pay its obligations sometime between July and September.