Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Anadolu: Erdogan issues presidential decree to freeze assets of dozens of Iranian entities linked to Iran’s nuclear program
Two killed in Manchester synagogue attack: UK police
Global Sumud Flotilla: We call for immediate international intervention to ensure the safety of the fleet's volunteers and secure their prompt release
Global Sumud Flotilla: More than 443 volunteers from 47 countries are being illegally detained after the fleet was seized by "Israel"
Global Sumud Flotilla: Israeli occupation forces intercepted the peaceful convoy’s ships in international waters and abducted hundreds of volunteers
Madi to Al Mayadeen: Preparations are underway to organize protests in Swiss cities in solidarity with the Sumud Flotilla
Spokeswoman for the Swiss ship of the Sumud Flotilla, Rania Madi, to Al Mayadeen: Six Swiss ships participating in the fleet confirmed they came under an Israeli attack
Media platforms: The navigational data of the Mikeno ship show it entering Gaza’s territorial waters, now just 9 nautical miles from the enclave
The first ship has reached Gaza’s territorial waters despite Israeli attempts to intercept it
The Omar Al-Mukhtar ship of the Global Sumud Flotilla is currently facing communication jamming, and the occupation’s military boats are approaching it. Contact with the vessel has been cut off.

US risks default by July unless debt limit is raised

  • By Al Mayadeen English
  • Source: News websites
  • 16 Feb 2023 09:54
  • 1 Shares
4 Min Read

The director of the Congressional Budget Office says the US public debt will surpass the economy outcome by 2033.

  • x
  • dasd
    Phillip Swagel, director of the Congressional Budget Office (CBO) (Bloomberg News)

The Congressional Budget Office (CBO) said the US Treasury could exhaust its funds by July leading to a default on American debt unless Congress raises the current $31.4 trillion debt ceiling.

The head of CBO, Phillip Swagel, warned on Wednesday that if IRS tax revenues fall short of its estimates, then “the extraordinary measures could be exhausted sooner, and Treasury could run out of funds before July.” 

The IRS is scheduled to receive the report on tax revenues in April.

The budget office now projects that the annual federal budget deficit over the next 10 years will reach $18.8 trillion despite its earlier estimates released last May that the figure would be 20% lower at $15.7 trillion.

Read more: US debt default might trigger global financial crisis

In short, the output of the US economy will equal the public debt by 2024 and is expected to rise [public debt] to 118% of the economy by 2033.

US Treasury Secretary Janet L. Yellen announced last January - upon reaching the debt limit - that "extraordinary measures" will be taken to prevent defaulting on debt and that the Treasury would temporarily suspend payments that aren't urgent and divert the money for more pressing needs i.e. services needed to keep the government operating.

Unless US President Joe Biden authorizes a new debt ceiling, which should be approved by Congress beforehand before the measures are exhausted, “the government would have to delay making payments for some activities, default on its debt obligations, or both,” added Swagel, noting that the agency will project a new estimate next May that includes the tax revenue of 2022.

Read more: US inflation causes national outstanding debt to exceed $31 trillion

Back in 2011, a protracted congressional struggle on raising the debt ceiling triggered a financial crisis that resulted in the US losing its top triple-A credit status from a major credit rating agency: Standard & Poors.

Related News

Putin warns Europe on militarization, calls Gaza war a tragedy

Tehran warns US amid Gulf buildup: 'We won't bow to pressure'

In February 2022, US national debt hit a record high of over $30 trillion. Debt had increased by around $7 trillion over the span of the pandemic. As a result of the trillions spent containing the virus, financial experts assessed that the new maximum would be reached many years sooner than what the country's government had projected.

According to the CBO, the 20% jump in the federal deficit project for the next decade is linked to several factors, including the cost of legislation passed by Congress last year, increasing costs of Medicare, Social Security, and future interest payments on a rising national debt, in addition to retiree and veteran benefits.

Read more: Americans favoring gov' shutdown over Congress approving more spending

The tax revenue, according to the budget office, will not be able to keep up with rising costs, while some tax revenues are expected to decline, such as gas taxes, as an increased number of citizens are switching to electric vehicles.

The gap between what the government spends and what it earns in tax revenues is expected to reach $1.4 trillion, while over the next decade, the annual deficit will average $2 trillion as tax return.

Meanwhile, the agency projected that tax revenue will not keep pace with these rising costs, and certain tax revenues are expected to fall, like those from gas taxes as more Americans drive electric vehicles.

Despite repeated bipartisan reassurance to the American public that the US will not default and that an agreement will be reached before the deadline, it is yet unknown how the bill will pass through a Republican-dominated Capitol Hill and Democratic-controlled Senate.

The question of what the law will look like is also of concern as a large number of Capitol Hill Republicans believe that Congress should pass extreme cuts to federal spending before they vote in favor of raising the debt limit.

According to Republicans, the debt ceiling and annual federal spending are indistinguishably linked, the same way household debt is a product of household spending.

However, Democrats argue that most of the federal spending is used to fund necessary expenses, such as Social Security payments or interest on the national debt, and that government spending can't be slashed like the household budget.

Read more: Biden assigns Brainard, Bernstein to head economic team

  • United States
  • Congressional Budget Office
  • US debt
  • US
  • CBO
  • Phillip Swagel
  • US economy

Most Read

Last photo showing Martyr Sayyed Hassan Nasrallah and Martyr Hajj Hassan in a Resistance operations room, Beirut's southern suburb, Lebanon, days before their martyrdom (Al Mayadeen)

In heart of battle: Al Mayadeen shares last photo of Sayyed Nasrallah

  • Politics
  • 27 Sep 2025
Hamas fighters stand in formation ahead of a ceremony to hand over Israeli captives to the Red Cross in Nuseirat, Gaza Strip, Feb. 22, 2025. (AP)

Hamas reviews Trump’s Gaza ceasefire plan as PIJ rejects

  • Palestine
  • 30 Sep 2025
Iraq at a crossroads: A new war front?

Iraq at a crossroads: A new war front?

  • West Asia
  • 30 Sep 2025
Trump’s 21-point Gaza plan vs Netanyahu’s demand for Hamas defeat

Trump vows 'something special' in ME; Israeli delegation in chaos

  • US & Canada
  • 28 Sep 2025

Coverage

All
War on Gaza

Read Next

All
From protests to sanctions: Europe’s shift away from 'Israel'
Politics

From protests to sanctions: Europe's shift away from 'Israel'

US arms sale to Nigeria raises human rights concerns.
Politics

US arms sale to Nigeria raises human rights concerns: RS

BBC exposé of Met Police racism and misogyny prompts Khan outrage
Politics

BBC exposé of Met Police 'racism', 'misogyny' prompts Khan outrage

Trump signs order pledging US defense of Qatar after Israeli strike.
Politics

Trump signs order pledging US defense of Qatar after Israeli strike

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS