CBO Says Debt Ceiling Crisis Could Be Here by July

A crisis over America's debt ceiling could be here by July—or even sooner, if tax revenues received in April are below expectations, the Congressional Budget Office warned Wednesday. The nonpartisan federal agency said the Treasury Department's emergency measures to avoid a default on America's debt will likely be exhausted some time between July and September unless lawmakers raise the debt limit from the current $31.4 trillion, CNBC reports. CBO Director Phillip Swagel said the "extraordinary measures could be exhausted sooner" if tax revenues come in significantly below estimates. Without a debt limit deal, the government will have to delay making some payments, default on its debt, or both, Swagel said.

The CBO also forecast that the US will add around $19 trillion to the national debt over the next decade, the New York Times reports. The agency said the debt will grow by around $3 trillion more than previously forecast, mainly due to rising interest rates and the cost of programs with bipartisan support, including expanded benefits for veterans. In a speech Wednesday, President Biden blamed GOP policies for the projected rise in the national debt, the AP reports. "It would explode the deficit and leave the American taxpayer holding the bag," Biden said.

Republicans have said spending cuts will be needed before they agree to raise the debt limit, but Biden said his budget, to be released March 9, would cut $2 trillion a year from the national debt while avoiding cuts to programs like Social Security. Biden has pledged not to raise taxes on Americans making under $400,000, though he is open to raising taxes on the wealthiest households. (More debt ceiling stories.)