The Congressional Budget Office has estimated that under its baseline budget projections, the Treasury would run out of cash sometime between July and September this year unless the debt ceiling is raised or suspended.
"If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully. As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both," said CBO Director Phillip Swagel.
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Swagel also noted that over the long term, their projections suggest that changes in fiscal policy must be made to address the rising costs of interest and mitigate other adverse consequences of rising debt.
The Office has estimated the federal budget deficit at $1.4 trillion this year, and annual deficits over the 2024–2033 period at an average of $2 trillion.
Growth: The CBO said that it expects economic growth to stagnate and inflation to slow in 2023 in response to the sharp rise in interest rates during 2022.
"After that, in CBO's projections, output grows at a more robust pace as inflation continues to decline toward the Federal Reserve's long-run goal of 2%," it stated.
The agency projected much weaker growth of real GDP for 2023 than it did last May, stronger growth during the 2024–2026 period, and similar rates of growth over the rest of the period.
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