The United States could run out of money to pay its bills as soon as June 1, according to the Treasury Department, if Congress does not lift the country’s $31.4 trillion borrowing limit. Failure to act could trigger an unprecedented default, which economists say could rattle financial markets and push the country into a recession.
Republicans who control the House of Representatives have insisted that any increase in national borrowing authority must include limits on federal spending. Here’s a look at how the U.S. government raises and spends money.
Though spending is due to subside in coming years as COVID-19 relief efforts recede, the United States isn't likely to return to balanced budgets any time soon.
House Republican Speaker Kevin McCarthy and Democratic President Joe Biden have both ruled out cuts to Social Security and Medicare, and Republicans have also pushed for an increase in defense spending. Democrats oppose new restrictions for antipoverty programs. Whatever solution emerges is not likely to make a significant dent in the country’s long-term fiscal problems.
Sources
Congressional Budget Office; Office of Management and Budget; Reuters reporting
Edited by
Matt Weber, Scott Malone