CBO Extends US Debt Limit Deadline to Mid-August

The Congressional Budget Office (CBO) has updated its estimate for when the United States will exhaust its financial measures to avoid breaching the $36.1 trillion debt ceiling, projecting the critical 'X-date' to fall between mid-August and the end of September. This revision extends the deadline by about two weeks from the previous March estimate, potentially giving Congress more time to negotiate an increase in the federal borrowing limit as part of President Trump's tax package. Treasury Secretary Scott Bessent has urged lawmakers to act by mid-July to prevent a default, warning of a reasonable probability that cash and extraordinary accounting measures will be exhausted during the August congressional recess. Despite federal revenues rising by 6%, higher spending—driven by increased Social Security payments and interest on debt—has resulted in a fiscal 2025 deficit near $1.4 trillion through May. Republicans are currently working on legislation to raise the debt limit, with some aiming to complete action by the July Fourth recess. The situation underscores ongoing fiscal challenges as the government balances rising deficits with the need to maintain borrowing authority.