Think Tank Estimates Debt Default Could Come by Early June

Treasury Secretary Janet Yellen said earlier this year the U.S. could default on its obligations by June as she talked about “extraordinary” measures that would be taken in the meantime.

On Wednesday, a Washington think tank agreed with her, saying it could happen by the fall, or even by early June, if Congress doesn’t raise the debt ceiling.

The Bipartisan Policy Center, which estimates the date when the government will no longer be able to meet its financial obligations on time, said in a statement posted to its website the U.S. will reach its statutory debt limit as soon as the summer or early fall. That moves it up from its original estimation of the third quarter of 2023, a prediction made a year ago.

Shai Akabas, the center’s director of economic policy, said the new projections reflect “considerable uncertainty in our nation’s current economic outlook,” according to a report from The Associated Press.

“Policymakers have an opportunity now to inject certainty into the U.S. and global economy by beginning, in earnest, bipartisan negotiations around our nation’s fiscal health and taking action to uphold the full faith and credit of the United States well before the X-Date,” he said, according to AP.

Akabas said the earlier projection is due to such factors as the December 2022 spending bill, an extended pause on student loan repayments and high interest rates resulting in higher costs to service U.S. debt.

President Joe Biden and Republican House speaker Kevin McCarthy met to talk about the debt limit.

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Brad Kadrich
Brad Kadrich is an award-winning journalist with more than 30 years’ experience, most recently as an editor/content coach for the Observer & Eccentric Newspapers and Hometown Life, managing 10 newspapers in Wayne and Oakland counties. He was born in Detroit, grew up in Warren and spent 15 years in the U.S. Air Force, primarily producing base newspapers and running media and community relations operations.