The United States government faces a “significant risk” of no longer meeting all of its financial obligations as early as June, as per a recent report.
According to a May 12 report published by the U.S. Congressional Budget Office (CBO), the risk of the U.S. government defaulting on its debts in the near future stems from reaching its statutory debt limit of $31.4 trillion on Jan 19.
The CBO predicts that if the debt limit remains unchanged, the U.S. government could be in hot water as early as June. It noted,“CBO projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.“
The CBO predicts the federal budget deficit will be $1.5 trillion in 2023, which is $100 billion more than initially estimated in February.It was emphasized that the outcome of the ongoing Supreme Court case regarding the cancellation of outstanding student loan debt could have a significant influence on the total revenue for 2023.
A shortfall in tax receipts recorded through April was also noted as having the potential to contribute to a larger deficit than initially predicted, according to the report.
However, based on its projected data, the CBO does not expect a decrease in the deficit’s growth anytime soon; it was predicted that the annual deficits will “nearly double over the next decade,” reaching $2.7 trillion in 2033.
The CBO predicts that 2033 will witness the highest level of national debt ever documented in the U.S., stating,“As a result of those deficits, debt held by the public also increases in CBO’s projections, from 98 percent of GDP at the end of this year to 119 percent at the end of 2033 — which would be the highest level of U.S debt ever recorded.”