US could run short of money to pay its bills by August

The United States is on track to hit its statutory debt ceiling – the so-called X-date when the country runs short of money to pay its bills – as early as August without a deal between lawmakers and the White House, according to a Congressional Budget Office report Wednesday.

By that time, the government would no longer have enough of a financial cushion to pay all its bills after exhausting its “extraordinary measures” the accounting manoeuvres used to stretch existing funds.

Washington would risk defaulting on its debt unless Congress and Republican President Donald Trump agree to lift the borrowing limit or abolish the debt ceiling concept altogether.

The debt limit was reinstated January 2, following its suspension by Congress in the Fiscal Responsibility Act of 2023.

“The Treasury has already reached the current debt limit of US$36.1 trillion, so it has no room to borrow under its standard operating procedures,” according to the CBO report.