Countdown to Default: U.S. Nears Debt Ceiling Crisis

The United States is approaching a critical economic juncture as it nears its debt ceiling, risking default without a Congressional agreement to raise the limit. Extraordinary measures by the Treasury are said to be exhausted by late summer, raising concerns about potential financial instability.

The United States faces a looming economic crisis as it approaches the statutory debt ceiling, potentially as early as August, unless lawmakers and the White House broker a deal. The Congressional Budget Office warns that without an agreement to either raise or eliminate the borrowing cap, Washington risks defaulting on its obligations.

Currently capped at USD 36.1 trillion, the debt limit was reinstated on January 2, after being suspended. With no room to borrow under existing procedures, extraordinary measures employed by the Treasury are running thin. Analysts from the Bipartisan Policy Centre project that the nation's funds may deplete by mid-July if no action is taken.

In response, the Treasury, under Secretary Scott Bessent, has halted payments into various federal worker pension and disability funds as a measure to stave off a breach. However, the Congressional Budget Office predicts these stopgap efforts could run out by August or September 2025, urging a sense of urgency from lawmakers.

(With inputs from agencies.)