Congress has to raise the national debt ceiling by October, or the federal government will run out of money, according to an announcement from the Congressional Budget Office, which said the deadline was approaching quicker than expected, Politico reports.
The CBO estimated that the Treasury “will most likely run out of cash in early to mid-October,” though it noted major changes in spending or revenues could still impact the timing. It had previously said the deadline would come “in the fall.”
“If the debt limit is not increased above the amount that was established on March 16, 2017, the Treasury will not be authorized to issue additional debt that increases the amount outstanding,” the CBO said in its report.
“That restriction would ultimately lead to delays of payments for government programs and activities, a default on the government’s debt obligations, or both.”
The CBO announcement comes as Congress struggles to follow through on Trump administration promises to repeal and replace the Affordable Care Act, which has taken longer than expected.
“I want to get [a debt limit vote] done in advance, but there is no set [decision] that we have to do it in July,” House Republican Leader Kevin McCarthy of California told Roll Call. “I think health is going to have to get done first,” he said.
The CBO said the U.S. faces a projected budget deficit of $693 billion by the fall, about $134 billion more than its most recent estimate, amid “surprisingly weak tax collections” and larger subsides for government programs.
The government has been using “extraordinary measures” since March when the suspension of the debt ceilng expired, CBS reports.
The Treasury Secretary, Steven Mnuchin, has urged action before the August recess, urging a “clean” increase. The Freedom Caucus, a group of conservative and libertarian Republican members of the House, has rejected that call.