The U.S. could default within weeks if Congress doesn’t take action to address the debt limit, the Bipartisan Policy Center (BPC) said Friday.
BPC projects that the “X date” when the U.S. would be unable to meet all of its obligations will most likely take place between Dec. 21-Jan. 28. That range is narrower than the think tank’s previous estimate of mid-December to early February.
BPC urged Congress to raise or suspend the debt limit before it leaves Washington for the year.
“Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed,” Shai Akabas, BPC director of economic policy, said in a news release. “Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit.”
Congress passed a $480 billion debt limit increase in mid-October, and the U.S. hit the new limit later that month. The Treasury Department has been using “extraordinary measures” since then to prevent a default.
Treasury Secretary Janet Yellen has urged Congress to raise the debt limit by Dec. 15, the date when Treasury is completing a $118 billion transfer to the Highway Trust Fund under the bipartisan infrastructure law President Biden signed last month. Yellen said at a congressional hearing this week that there is uncertainty about what the Treasury’s cash balances would be after that date.
Senate Majority Leader Charles Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) have been having discussions to figure out a path forward on the debt limit, but have yet to announce an agreement.