Washington, D.C. – The Congressional Budget Office report today on its budget and economic outlook contained a projection that was consistent with the Bipartisan Policy Center’s analysis on the debt limit. BPC has projected that the U.S. Treasury will run out of room to continue paying the nation’s bills in full and on time in the November-December time frame.
“We still predict, as we have for several months, that November or December seems the likely time frame within which Treasury will no longer be able to borrow money from other government sources and will have to resort to day-to-day receipts in order to pay government bills,” Steve Bell, senior director of economic policy at BPC, said.
Today’s report revised CBO’s debt growth projections down slightly from their March baseline, but much of the decline stems from abnormally low interest rates. If interest rates revert to historical norms, deficits and debt will be substantially larger, he said.
“CBO’s report emphasizes once again that although annual deficits have declined, America’s debt continues to grow on an unsustainable path. We believe that it is a sign of complacency among policymakers that the debt and deficits have been rarely mentioned as legislative priorities. It is unfortunate that of the nearly two dozen candidates running for president today, virtually none of them have placed a focus on this important issue. We hold out hope that this fall’s congressional debate over appropriation bills, the debt, and other spending matters may lead to larger consideration of a long-term debt stabilization bill. In the meantime, policymakers should take into account the evidence that delaying action on the debt limit can adversely affect markets and our economy,” Bell said.