According to the United States Congressional Budget Office (CBO), the government’s yearly deficits are expected to almost double in the next ten years.
A recent report warns that the United States government may face a serious problem by June, as it could struggle to meet all of its financial obligations. The report, published by the U.S. Congressional Budget Office (CBO) on May 12, explains that the risk of a government default arises from reaching the maximum allowed debt limit of $31.4 trillion on January 19.
According to the CBO, if the U.S. debt limit is not raised, the government could face significant financial challenges as soon as June. The CBO warns that urgent action is needed to address this situation.
The CBO has projected that if the U.S. debt limit stays the same, there is a notable risk that in the first two weeks of June, the government may not have enough funds to fulfill all its financial obligations.
The CBO now forecasts a federal budget deficit of $1.5 trillion for 2023, which is $0.1 trillion higher than its previous estimate in February.
The ongoing Supreme Court case on canceling student loan debt was highlighted as having a big impact on the total revenue for 2023.
The report mentioned that a lower-than-expected amount of tax money collected until April could result in a larger deficit than originally anticipated.
According to the CBO’s projections, there is no expected decrease in the deficit in the near future. In fact, the annual deficits are projected to almost double over the next ten years, reaching $2.7 trillion by 2033.
The CBO also forecasts an increase in the debt held by the public over the next decade.
Due to the projected deficits, the CBO expects the amount of debt held by the public to rise. It is estimated to increase from 98 percent of the country’s Gross Domestic Product (GDP) at the end of this year to 119 percent by the end of 2033.
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