U.S. Worried About So Called ‘X’ Moment In May, Will The Shocking Budget Report Derail Trump’s Tax Cut Dreams? News24 –

United States may run out of cash to pay its bills by late May. The shocking revelation came from the Congressional Budget Office Wednesday. The Congressional Budget Office (CBO) said that the so-called X-date could occur as early as spring if Congress does not lift or suspend the nation’s debt limit. The forecast has put added pressure on the Congress and the Trump administration to address the borrowing cap.

Trump Administration’s Borrowing Cap

The United States limits the amount of money it can borrow to fund the government and meet its financial needs. If Congress and the Trump administration fail to reach an agreement on raising the borrowing limit, it could lead to prolonged uncertainty.

What CBO Said

According to a New York Times report, The Congressional Budget Office (CBO) warned that its projections depend on uncertain tax revenue. It estimates that the U.S. government will have enough funds to pay its bills until August or September. However, if borrowing needs exceed expectations, the government could run out of cash as early as late May or June.

“The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from C.B.O.’s projections,” the budget office said in a report.

The ‘X’ Moment

The so-called X-date mention in the CBO report is the moment when the United States will run out of cash. The report says that it will be unable to pay its bills, including interest payments to investors who hold government debt. Failure to meet those obligations could result in the United States defaulting on its debt. The U.S. has always honored its debt, making it one of the world’s safest investments. However, political standoffs over missed payments could shake investor confidence and cause serious economic consequences.

How Much Is The National Debt?

According to The New York Times report, the national debt is now approaching $37 trillion. Lawmakers agreed in June 2023 to suspend the $31.4 trillion debt limit until Jan. 1, 2025. Janet L. Yellen, the Treasury secretary under President Joseph R. Biden Jr., told Congress in mid-January that the Treasury Department would need to start using “extraordinary measures” on Jan. 21 to allow the United States to keep meeting its financial obligations. The report stated Janet L. Yellen, the Treasury secretary under President Joseph R. Biden Jr., told Congress in mid-January that the Treasury Department would need to start using “extraordinary measures” on Jan. 21 to allow the United States to keep meeting its financial obligations.

Since the federal government spends more than it earns, it borrows large amounts to cover expenses, including social safety net programs (Medicare, Social Security), military salaries, and interest payments on government debt.

Adding to the problem, the Internal Revenue Service (IRS) is facing internal disruptions, including the removal of thousands of probationary employees, which has delayed audits and weakened tax collection efforts. As a result, the government might collect less tax revenue than expected, potentially worsening the financial situation.

Trump’s Tax Cut Promise

During his election campaign, Donald Trump has made numerous tax cut promises, but implementing them may be challenging in Congress. His proposals include removing the cap on state and local tax deductions, a limit he originally introduced in his 2017 tax law.