US Congressional Budget Office Warns of Possible Government Default Due to Debt Limit Crisis
Date
5/14/2023 2:25:43 AM
(MENAFN) The US Congressional Budget Office (CBO) has issued a warning that the government's debt obligations are at significant risk in the first half of June due to the ongoing debt limit crisis. The CBO has projected that if the debt limit remains unchanged, the government may not be able to pay all of its obligations in the first two weeks of June. The agency has further cautioned that the extent to which the Treasury will be able to fund the government's ongoing operations will remain uncertain throughout May, even if the Treasury ultimately runs out of funds in early June.
The CBO has warned that if the debt limit is not raised or suspended before the Treasury's cash and extraordinary measures are exhausted, the US government will have to delay making payments for some activities, default on its debt obligations, or both. This warning comes as the US government is grappling with the debt limit crisis and the need to raise or suspend the debt ceiling. The debt limit is a cap on the amount of money the US government can borrow to pay its bills. Failure to raise the debt limit could have serious consequences for the country's financial stability and economic growth.
President Joe Biden and Treasury Secretary Janet Yellen have been urging Congress to take swift action to raise the debt limit in order to avoid the US defaulting on its debt obligations. Biden has emphasized that America is not a deadbeat nation and that the country has never defaulted on its debt. Yellen has also warned that Congress failing to raise the nation's debt limit could lead to defaulting on its debt and may cause financial and economic chaos.
The CBO's warning highlights the urgent need for Congress to take action to raise or suspend the debt limit to avoid a potential government default.
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