US could run out of cash by July, analysis finds

Bipartisan Policy Center.

That deadline, known as the «X-date» — the moment when the United States is unable to meet its financial obligations and might default on its debt — is a fiscal milestone that's among the most closely watched in Washington and on Wall Street.

The date is subject to considerable uncertainty. It relies on estimates of how much wiggle room the Treasury has to use accounting maneuvers — known as «extraordinary measures» — to keep paying the government's bills by shifting money around. The Bipartisan Policy Center, a think tank, provided estimates suggesting that the X-date could come as late as the beginning of October.

Efforts to address the debt limit will likely consume Congress and the Trump administration later this year as Republicans race to enact trillions of dollars of tax cuts.

The debt limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.

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Because the federal government runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. Those obligations include funding for social safety net programs, salaries for members of the armed forces and paying investors who have bought U.S. government debt in exchange for interest payments.

After a protracted fight, lawmakers agreed in June 2023 to suspend the $31.4 trillion debt limit until Jan. 1, 2025.

The national debt is now approaching $37 trillion. Republicans have been cutting federal jobs at government agencies and expressed a commitment to curbing wasteful spending, but lawmakers have showed little appetite for cutting social safety net