Debt Ceiling Crisis: Default Threat Looms

The U.S. government faces the risk of defaulting on its $36 trillion debt between July and October if Congress does not act to raise or suspend the debt ceiling. The Congressional Budget Office and the Bipartisan Policy Center have warned that the 'X-date,' when the Treasury Department will no longer be able to meet its obligations, could occur as early as July or as late as September, contingent on federal revenue collections. The Treasury has been using 'extraordinary measures' to extend the government's borrowing capacity since the debt ceiling was last addressed in 2023. A package proposed by House Republicans aims to raise the debt ceiling by $4 trillion while also addressing border security and tax cuts, but disagreements in the Senate have stalled its progress. Lawmakers are urged to act promptly to prevent financial markets' instability and preserve the U.S.'s creditworthiness. The urgency is amplified by lower-than-expected tax revenues and additional economic pressures like natural disasters and tariffs.