If tax collections wind up being enough to keep Treasury’s coffers flush through early June, then it’s likely the government won’t default until much later in the summer. However, a surge of tax revenue last week prompted two analysts to revise their forecasts to the second half of July. A trio of analysts issued reports warning that the default date could hit soon. The likelihood of an early June default grew in recent weeks when April tax receipts were coming in weaker than expected. But she warned the projection was subject to considerable uncertainty.Ī variety of forecasters have estimated that the so-called X-date, when the US would default, would arrive over the summer or in the early fall. When the US hit its $31.4 trillion debt ceiling in January, Yellen informed Congress that cash on hand and “extraordinary measures” should last at least until early June. It had originally projected that the default could happen between July and September. The Congressional Budget Office also updated its forecast on Monday, saying that there is a “significantly greater risk that the Treasury will run out of funds in early June” because of weaker-than-expected tax collections. “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” she continued. “We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” Yellen wrote. She will continue to update Congress as more information becomes available, but she reiterated that it’s “imperative” that lawmakers act as soon as possible. Yellen warned that the actual date that Treasury exhausts its ability to pay the government’s bills on time and in full could be “a number of weeks later than these estimates.” She noted that it’s impossible to pinpoint an exact date since the amount of revenue the federal government collects and the amount it spends is variable. Interactive: The $31.4 trillion debt dilemma
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