News: The United States could run out of money to pay its bills by August

WASHINGTON - According to a Congressional Budget Office report from Wednesday, the United States is currently on track to hit its statutory debt ceiling.

This date, when the country runs short of money to pay its bills, could occur as soon as August. This would only occur if a deal is made between lawmakers and the White House before that time.

The debt ceiling was reinstated on January 2 after previously being suspended by Congress in the Fiscal Responsibility Act of 2023.

The Congressional Budget Office report also revealed that the Treasury has reached its current debt limit of $36.1 trillion with no room to borrow under standard operating procedures.

President Donald Trump had previously demanded for a provision raising or suspending the debt limit to be included in legislation to prevent the last government shutdown.

No deal being made would result in a default period, which could result in the loss of millions of jobs, according to experts. With how serious the consequences are, a deal has always been able to be made, even if it was done at the last minute in some instances.

Since January, the Treasury Department has stopped paying into certain accounts like federal work pension and disability funds in an attempt to make up for the shortfall in money.

The current Treasury Secretary, Scott Bessent, has continually notified Congress regarding the use of extraordinary measures to prevent the debt ceiling from being reached.

The House has added a $4 trillion increase in the debt ceiling as part of a Republican budget plan, but the Senate still has to agree upon that increase, and it is unclear whether the chamber will do so.

Congressional Budget Office leadership in the House and Senate is negotiating a resolution, with the latest meeting being Tuesday at the White House.

Nikolai Wagner is a first-year majoring in broadcast journalism. To email him, contact njw5648@psu.edu.