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According to a recent report, the United States government faces a “significant risk” of being unable to meet all of its financial obligations as early as June.
According to a report released on May 12 by the Congressional Budget Office (CBO), the risk of the US government defaulting on its debt in the near term is that it reached its legal debt limit of $31.4 trillion on January 19.
CBO predicts that if the debt limit remains unchanged, there is a risk that the US government will not be able to meet its financial obligations as early as June. He noted:
“The CBO predicts that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.”
The CBO currently projects a $1.5 trillion federal budget deficit in 2023, up $0.1 trillion from what was estimated in February.
It was stressed that the outcome of the ongoing Supreme Court case regarding the write-off of outstanding student loan debt could have a significant impact on overall income for 2023.
The report notes that the shortfall in tax revenue recorded in April could also lead to a larger deficit than originally estimated.
Related: How Will a US Debt Default Affect Bitcoin?
However, based on its forecast data, the CBO does not expect the deficit to narrow in the near future — in fact, the annual deficit is projected to “nearly double over the next decade”, reaching $2.7 trillion in 2033.
The CBO predicts that public debt will also increase over the next ten years. It was observed:
“As a result of this deficit, public debt is also increasing, according to CBO forecasts, from 98 percent of GDP at the end of this year to 119 percent at the end of 2033.”
