BREAKING: CBO Sounds The Alarm, Says ‘Significant Risk’ Of Default Is Just Weeks Away

The Congressional Budget Office affirmed that there is “significant risk” of default in early June if Congressional leaders cannot come to an agreement on raising the debt ceiling.

“The Congressional Budget Office projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations,” reads an updated guidance released by the CBO on Friday. “The extent to which the Treasury will be able to fund the government’s ongoing operations will remain uncertain throughout May, even if the Treasury ultimately runs out of funds in early June,” the update continued.

The CBO went on to say that emergency measures and tax revenues will “probably allow the government to continue financing operations through at least the end of July.”

From a White House spokesperson on Friday debt ceiling meeting being cancelled: “Staff will continue working and all the principals agreed to meet early next week.” Fox is told the meetings are going well and they didn’t think they needed the principals at the table again yet

— Chad Pergram (@ChadPergram) May 11, 2023

Friday’s report came after Congressional leaders and the White House cancelled a scheduled Friday meeting to negotiate an agreement on the debt ceiling. citing little progress on a deal, according to a report from CNBC. House Republicans have said they are in favor of raising the debt ceiling in exchange for spending cuts, while Democrats want the debt limit raised without any strings attached.

The CBO also released an updated projection of the federal budget deficit for the current year, raising it to $1.5 trillion.

In addition, the office warned that there is still “a great deal of uncertainty” around the deficit figure, in part due to an upcoming Supreme Court ruling on President Biden’s student loan forgiveness plan. If the $400 billion plan is struck down by the court’s conservative majority, the administration would likely record the money it set aside for the loan forgiveness last year as a reduction in outlays this year, CNBC reported.

The CBO is a nonpartisan federal agency that provides budget and economic data to Congress.