WASHINGTON — The United States could run out of cash to continue paying its bills by mid-July if Congress does not take action to raise or suspend the nation’s debt limit, according to an analysis Monday by the Bipartisan Policy Center.

That deadline, known as the “X-date” — the moment when the United States is unable to meet its financial obligations and might default on its debt — is a fiscal milestone that’s among the most closely watched in Washington and on Wall Street.

The date is subject to considerable uncertainty. It relies on estimates of how much wiggle room the Treasury has to use accounting maneuvers — known as “extraordinary measures” — to keep paying the government’s bills by shifting money around. The Bipartisan Policy Center, a think tank, provided estimates suggesting that the X-date could come as late as the beginning of October.

Efforts to address the debt limit will likely consume Congress and the Trump administration later this year as Republicans race to enact trillions of dollars of tax cuts.

Debt Limit Is Cap on Total Amount of Money

The debt limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.

Because the federal government runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. Those obligations include funding for social safety net programs, salaries for members of the armed forces and paying investors who have bought U.S. government debt in exchange for interest payments.

After a protracted fight, lawmakers agreed in June 2023 to suspend the $31.4 trillion debt limit until Jan. 1, 2025.

The national debt is now approaching $37 trillion. Republicans have been cutting federal jobs at government agencies and expressed a commitment to curbing wasteful spending, but lawmakers have showed little appetite for cutting social safety net programs, which are the biggest drivers of the growing debt.

“Policymakers must commit to responsible budgeting, which starts with avoiding debt limit brinkmanship and its impacts on our economy,” Margaret Spellings, the president of the Bipartisan Policy Center, said in a statement.

The analysis said that spending on disaster relief, the pace of tax 2024 collections and additional government revenue from Trump’s tariffs could affect the timing of the X-date. Savings from cuts recommended by the new Department of Government Efficiency could also extend the deadline.

Janet Yellen, the treasury secretary under President Joe Biden, told Congress in mid-January that the Treasury Department would need to start using “extraordinary measures” Jan. 21 to allow the United States to keep meeting its financial obligations.

Those measures are essentially accounting maneuvers that can prevent the government from breaching the debt limit. They can include suspending certain types of investments in savings plans for government workers.

Trump Says Debt Limit Was ‘Trap’ Set by Democrats

President Donald Trump said last year, before taking office, that he thought the debt limit was a “trap” set by Democrats and urged lawmakers to lift the borrowing cap or abolish it entirely.

Treasury Secretary Scott Bessent expressed skepticism about abolishing the debt limit during his confirmation hearing in January. He said, however, that he would study the idea and potentially work with Democrats, many of whom have long said that the debt limit creates unnecessary risks, on changes to the cap. Bessent told Bloomberg News last month that he was discussing the matter with large holders of U.S. debt.

In a letter to Congress this month, Bessent said that he was continuing to deploy the measures set in motion by Yellen. Those included pausing some investments in the Civil Service and Retirement Disability Fund and the Postal Service Retiree Health Benefits Fund.

The treasury secretary said that he expected to provide an update in May on how long its cash would last and pointed to “unavoidable uncertainty” surrounding such forecasts.

“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Bessent wrote.

House Republicans unveiled a budget outline last month that would raise the debt limit by $4 trillion and approve more than $4 trillion in tax cuts.

It is not clear how many Senate Republicans would support such a measure to lift the borrowing cap or if they would require the backing of some Democrats.

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This article originally appeared in The New York Times.

By Alan Rappeport/Eric Lee
c. 2025 The New York Times Company