US Treasury Faces Potential Default by August, CBO Warns

The Congressional Budget Office (CBO) has warned that the U.S. could run out of cash to meet its obligations as early as August if Congress does not raise or suspend the statutory debt ceiling, currently set at $36.1 trillion. The government has already exhausted its 'extraordinary measures' and risks defaulting on payments including Social Security and military salaries. President Donald Trump has linked any deal regarding the debt ceiling to broader budget negotiations, emphasizing that failure to act would be 'a betrayal of our country.' An analysis from the Bipartisan Policy Center suggests that the U.S. could face a cash shortfall as soon as mid-July. If Congress cannot reach an agreement, it would mark the first time the U.S. defaults on its debt, which could lead to severe economic consequences including job losses and disruptions to essential services. The CBO's projections highlight an urgent need for legislative action to prevent a financial crisis.