CBO Warns U.S. Could Default as Early as May Without Debt Ceiling Action

The Treasury Department's extraordinary measures may be exhausted sooner than anticipated due to declining tax revenues and higher borrowing needs.

The Congressional Budget Office (CBO) projects the U.S. could default on its debt between May and September 2025, depending on tax revenue and spending levels.
Extraordinary measures currently delaying default could run out as early as late May or June if tax receipts fall short or borrowing needs increase.
Tax revenue for 2025 is expected to be up to 10% lower than 2024 levels, potentially accelerating the timeline for default.
Congressional Republicans are considering using budget reconciliation to address the debt ceiling, but partisan disagreements over spending priorities persist.
A default would have severe economic consequences, including disruptions to Social Security, Medicare, and military payments, as well as global financial instability.