Already deploying what it calls extraordinary measures to keep paying its bills after bumping up against the debt ceiling in January, the U.S. Treasury could run out of cash as soon as early June, according to a new analysis by the Bipartisan Policy Center.
The non-partisan group on Tuesday updated its estimate of when the X-date could arrive, saying that it is “most likely to occur between early June and early August of 2023.” The estimate is in line with the one provided last week by Treasury Secretary Janet Yellen, who warned Congress that the U.S. could run out of cash by June 1.
Shai Akabas, director of economic policy at BPC, said that while he cannot define a particular day that the X-date will occur, he has “significant concern” that it could arrive in early June. “I still don't think now is the time for panic, but it's certainly time to start getting concerned because we're possibly only weeks away from the X-date,” Akabas told CBS News.
BPC said that the showdown over raising the debt limit is already generating economic costs. “On May 4, 2023, Treasury sold $50 billion of four-week securities scheduled to mature on June 6 at a record 5.84%—the highest yield for any Treasury bill auction since 2000—demonstrating an aversion among investors to hold debt maturing around the X Date,” the group said.
BPC’s Michael Thorning also noted that time is running out on a parliamentary maneuver called a discharge petition that House Democrats hope to use as an alternative option in the event that the White House and Congress cannot agree on a plan to raise the debt ceiling. “The process set forth in House rules includes multiple layover periods which will conflict with the House's scheduled work period beginning May 26 and ending June 4,” Thorning wrote. “Consequently, even if Democrats can recruit the necessary five Republican signatures for the discharge petition, by the time the process comes to a head, it will be too late to avoid default if June 1 is the deadline. At the earliest, the discharge process could be completed sometime between June 5 and June 7.”
