The US National Assembly Budget Office (CBO) reported that the government's borrowing capacity could exhaust in August or September, using extraordinary measures if there was no action of debt limit.
CBO has published a report “Federal debt and legal border”. The US treasury has reached the current debt limit of $ 36.1 trillion and estimates that the government's borrowing capacity may exhaust in August or September if the debt limit has not changed. The report declares that collections and income spending will be carried out in the mid -day months and the CBO prediction may vary. The debt limit will not be able to fulfill its obligations if the debt limit does not increase or suspend without exhaustion or suspension, in this case, the Government will have to delay the payments of some spending, unable to fulfill the debt obligation or execute both. What does the debt limit mean? The US debt limit means “the total amount of money that the US government has authority to fulfill the current legal obligations”. The US treasury has the authority to borrow until the limit is set by the National Assembly. If the debt limit is reached, the federal government cannot increase the debt, only cash and income. To increase the limit, there should be permission by passing the congress. In the United States, the Federal Government recently reached the debt limit of $ 31.4 trillion in early 2023. The debt limit was suspended in June 2023 to January 1, 2025 after months of negotiations in the US National Assembly. The extraordinary measures were taken to prevent the current debt limit of $ 36.1 trillion of the US Treasury.