The U.S. Capitol in Washington, D.C., is pictured on Monday, April 15, 2024.  (Photo by Jennifer Shutt/States Newsroom)

The United States could default between Aug. 15 and Oct. 3 if Congress doesn’t act to raise or suspend the debt limit before then, according to a projection the Bipartisan Policy Center published Wednesday.

The new estimate from the centrist Washington, D.C., think tank would give Congress slightly more time to address the issue than the center’s last analysis that projected the so-called X-date could hit as early as July.

Quarterly taxes received in April were higher than expected, while the economy has remained stable, which combined to help push the date later, the center said in a Wednesday news release.

The projection aligns with the nonpartisan Congressional Budget Office estimate this month that the X-date would come between mid-August and the end of September. 

The Bipartisan Policy Center analysis does not change the recommendation from the center, Treasury Secretary Scott Bessent and others that Congress deal with the debt limit sooner rather than later.

“Congress must address the debt limit ahead of the August recess,” Margaret Spellings, president and CEO of the center, said in the Wednesday release. “Congress can’t afford to inject any additional uncertainty into the mix. They need to act soon to prioritize our nation’s financial stability and reassure global markets that we take this responsibility seriously.”

Both the House and Senate are scheduled to be in recess Aug. 4 through Sept. 2.

Global crisis looms

If Congress does not act, the U.S. would default on its debt for the first time, likely leading to a global financial crisis.

As of June 18, the federal treasury had $384 billion in cash on hand and could save another $89 billion through “extraordinary measures,” the term for accounting tricks the government can use to save cash in an emergency.

The exact date will depend on how much the government spends in July and August — months that typically see large deficits, according to the Bipartisan Policy Center.

If the government can avoid the debt limit until quarterly taxes are due on Sept. 15, those receipts would likely give more breathing room until early October, the center said.

Other factors that could influence the X-date include fluctuating tariff revenue and the potential for costly hurricanes this summer.

Big beautiful debt limit increase

The reconciliation package Republicans in Congress are racing to send to President Donald Trump’s desk by July Fourth includes a raise in the debt limit. The version that passed the House would raise the debt ceiling by $4 trillion, while the Senate version would increase it by $5 trillion.

Republican senators are scrambling this week to revamp several pieces of the legislative package as the chamber’s parliamentarian rules that some do not meet the strict rules for what can be considered under the fast-track procedure known as budget reconciliation.

The process allows the Senate to pass the bill with a simple majority, meaning Republicans could pass it without Democratic votes. But Republicans are still haggling among themselves over provisions to aid rural hospitals amid changes to Medicaid, sell off public lands and others.

Once passed in the Senate, either the House would have to approve that version or both chambers would have to vote on some kind of compromise language before Trump could sign the bill.

New Nissan cars are driven onto a rail car to be transported from an automobile processing terminal located at the Port of Los Angeles on April 3, 2024, in Wilmington, California.  Tariffs are being levied by President Donald Trump on most foreign vehicles and auto parts.  (Photo by Mario Tama/Getty Images)

WASHINGTON — President Donald Trump’s tariffs would decrease the deficit over the next decade but overall shrink the U.S. economy and raise costs for consumers, according to a Congressional Budget Office analysis released Wednesday.

Tariffs are paid to the U.S. government by domestic companies and purchasers who buy goods from abroad.

The nonpartisan CBO found that tariffs would reduce the nation’s primary deficit by $2.5 trillion from now until 2035, plus an additional $500 million saved from avoiding even more mounting interest payments on the U.S. debt.

But the office also found that tariffs would slow down the U.S. economy over the same time, in part by affecting behavior in the private sector.

For example, businesses may pull back from investment and growth when faced with higher costs. The CBO, the official financial scorekeeper for Congress, estimates that Trump’s tariffs, as they stand now, would lower the U.S. gross domestic product, or the total value of a country’s goods and services, on average by 0.6% per year through 2035. 

In addition to increasing costs on supplies and other assets businesses use in production, the tariffs are expected to raise prices on consumer goods in the next couple years. The CBO projects the price index used to measure personal consumption will be 0.9% higher by the end of 2026.

While lower-income households spend a higher percentage of their income on consumer goods, the CBO projects that prices will increase the most on goods like home appliances and vehicles more likely to be purchased by higher earners.

The eight-page analysis only takes into account the effects of Trump’s tariffs as of May 13. These include the following taxes calculated on the value of imports: a baseline 10% on goods from most countries; a base of 30% on all goods from China and Hong Kong; 25% on most foreign vehicles and auto parts; 25% on steel and aluminum; and 25% on certain goods from Canada and Mexico.

The CBO released the figures in response to a request from U.S. Senate Democrats wanting to know the cost of the administration’s import taxes.

The report did not take into account any tariff changes after May 13, including Trump’s doubling to 50% the import taxes on steel and aluminum. The report also did not factor in changes that could result from a May 29 trade court decision striking down most of Trump’s tariffs — though an appeals court swiftly left them in place while the case plays out.