US Government Faces ‘Significant Risk’ of Default in June, Congressional Budget Office Warns – Economics Bitcoin News
The Congressional Budget Office (CBO) stressed that “there is a significant risk that the Treasury will run out of money sometime in the first two weeks of June” if the debt ceiling is not raised or suspended. The CBO’s forecast is in line with the Treasury’s estimate that a default in the US could occur on June 1.
The CBO sees “significant risks” from the US defaulting in June
The Congressional Budget Office (CBO) released an update on budget projections from 2023 to 2033 on Friday. The report updates the Central Bank of Oman’s budget forecast issued in February.
“The basic forecasts of the Central Bank of Oman are developed in accordance with the procedures stipulated in the law. These procedures require the agency to project spending, revenue, deficits, and debt regardless of the legal limit for issuing new federal debt. That limit (now set at $31.4 trillion) was reached on January 19, 2023,” the report details, adding:
The CBO estimates that if the limit is not lifted or suspended, there is a significant risk that the treasury will run out of money at some point in the first two weeks of June.
The CBO’s estimate is in line with that of US Treasury Secretary Janet Yellen, who said earlier this month that the Treasury may not be able to pay all government bonds as early as June 1 “if Congress does not raise or suspend the debt limit before then.” .”
Many people have warned of the repercussions of a US default on its debt obligations. The International Monetary Fund said there would be “very serious repercussions”. Federal Reserve Chairman Jerome Powell warned of “uncertain and adverse” consequences. US Securities and Exchange Commission (SEC) Chairman Gary Gensler expects “significant” and “lasting” effects on investors, issuers and markets. Goldman Sachs believes the consequences will be “catastrophic”.
Meanwhile, former president and 2024 presidential candidate Donald Trump has urged Republican lawmakers to allow the United States to default on its debt if Democrats do not agree to spending cuts. “It’s better than we do now,” he said, “because we spend money like drunken sailors.”
Do you think the US will default on its debt obligations in June? Let us know in the comments section below.
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