WASHNIGTON DC – In early September, Washington may face default due to very low tax revenues, Bloomberg reported citing a report from the Bipartisan Policy Center (BPC).
The BPC said on Monday that there was a “significant risk” that the US would exceed its public debt ceiling in early September, unless Congress acts.
The agency revised its previous forecast that the date on which Washington would default on payment obligations would be between October and November.
The US Treasury Department has used the so-called extraordinary measures to meet debt obligations since March 2, when Washington has reached its maximum indebtedness ceiling.
The reason for this was a very low tax revenue, which increased only 3% over last year, instead of the expected 6%.
Compliance with credit obligations
Bloomberg also reports that the lower chamber of the US House of Representatives will enter into recess on July 26, but that the question of raising the public debt ceiling was not raised.
BPC chief economist Shai Akabas said the government should not leave Washington at the end of the month without raising the debt ceiling.
According to him, otherwise Washington will be risking failure to meet its credit obligations.
He explained that this is putting a reckless risk on US faith and credit.
At the beginning of 2019, for the first time in history, the US national debt surpassed the $22 trillion mark.
In addition, during fiscal year 2018, the United States budget deficit increased 17% to $779 billion. It is expected to exceed the trillion dollar mark by 2020.
Public debt is expected to continue to accelerate growth, as public spending is out of control.
Historical records of debt
In June, the US Congressional Budget Office (CBO) predicted that US federal debt will continue to rise dramatically over the next 30 years, reaching 144% of GDP in 2049.
Debt is projected to continue to grow by a trillion dollars annually over the next decade due to the payment of pensions and the health care expenses of the baby boomer generation.