Congressional Budget Office predicts a significant risk of default in the US in early June

The US will face a significant risk of federal debt default for the first time ever in the first two weeks of June if Congress and President Joe Biden’s administration do not act to raise the debt limit. Such data appears in the published report of the Congressional Budget Office.

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According to the report, if the national debt ceiling is not raised, “there is a significant risk that funds in the Treasury will run out at some point in the first two weeks of June,” leading to a default.

“The extent to which the Ministry of Finance will be able to fund the government’s current operations will remain uncertain throughout May, even if the ministry eventually runs out of funds in early June,” the report said. The authors attribute this “great uncertainty” to the fact that “the timing and amount of revenues and expenditures in the past weeks may differ from the department’s projections”.

Should the Ministry of Finance, through cash and emergency measures, be able to keep the government running until June 15, the agency estimates that quarterly tax revenues expected around that time, along with additional emergency measures, could “allow the government to continue funding operations until at least the end of July”.

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Congressional Budget Office predicts a significant risk of default in the US in early June