The U.S. government could run out of cash to pays its bills by mid-October, according to a new analysis from a Washington think tank, and economists warn the unprecedented debt default could trigger a financial crisis.
The forecast from the Bipartisan Policy Center shows the “X Date” – the day when Treasury Secretary Janet Yellen runs out of maneuvering room to prevent the U.S. from broaching the debt ceiling – will take place sometime between Oct. 15 and Nov. 4.
“New data demonstrate that Congress has only weeks to address the debt limit,” Shai Akabas, director of economic policy at the Bipartisan Policy Center, said in a statement. “If they don’t, the U.S. government risks missing or delaying critical bills that will come due in mid-October that millions of Americans rely on, from military paychecks and retirement benefits to advanced child tax credit payments.”
The U.S. has never defaulted on its debt before, although it came close in 2011 when House Republicans refused to pass a debt-ceiling increase, prompting rating agency Standard and Poor’s to downgrade the U.S. debt rating one notch.
