Imminent debt default: U.S. hurtling toward August debt crisis as CBO warns government could run out of money without Congressional action; here's how it will affect Americans

financial crisis as the Congressional Budget Office (CBO) claimed that the government may be out of money as early as August unless Congress comes to an agreement on raising the debt ceiling, reported ABC News. This so-called «X-date» is when the US will no longer have sufficient funds to pay its bills, leading to default on its debt, as per the report.

Extraordinary Measures Are Running Out

According to the CBO report, the US would no longer have enough of a financial cushion after it exhaustes «extraordinary measures,» a series of accounting techniques employed to stretch available funds, Washington won't be able to pay its bills, reported ABC News.
Unless Congress acts quickly to raise the borrowing limit, or abolish the debt ceiling, the US may default on its debt obligations, as per the report.

According to CBO's estimation, «if the debt limit remains unchanged, then the government’s ability to borrow using extraordinary measures will probably be exhausted in August or September 2025,» quoted ABC News.

The Debt Ceiling Was Reinstated

The limit on this debt was restored on January 2 via the Fiscal Responsibility Act of 2023, reported ABC News. When the debt limit was restored, former Treasury Secretary, Janet Yellen had highlighted that the Treasury would institute “extraordinary measures" intended to prevent the US from reaching the debt ceiling, according to ABC News.

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As per the CBO, “The Treasury has already reached the current debt limit of $36.1 trillion, so it has no room to borrow under its standard operating procedures,” quoted ABC News

The US Could Be Out of Cash by Mid-July

The Bipartisan Policy Center released a different report earlier this week, predicting that the US would be out of