WASHINGTON — The United States could default on its loans sometime between July and October if Congress doesn’t pass legislation to raise the debt limit, according to the most recent projections by the Bipartisan Policy Center released on Monday.
Although the center did not specify a day, known as the “X-date,” the projection gives lawmakers an early warning before risking missed payments on the country’s loans. The projection comes as lawmakers must decide how to move forward on raising the debt ceiling, whether it’s through Republicans’ massive budget reconciliation package or as a standalone bill.
The House passed a budget resolution in February paving the way for a trillion-dollar tax reconciliation package to advance President Donald Trump’s agenda. Included in that bill was a $4 trillion increase of the debt ceiling, a key element needed to secure support from hardliners in the conservative House Freedom Caucus.
However, that resolution has since hit snags in the Senate over disagreements on how to approach tax cut extensions, delaying its passage in the upper chamber. That could put the country on track to default on its loans for the first time in recent history if the reconciliation package isn’t approved before the “X-date.”
The Bipartisan Policy Center’s report is one of several predictions for when the country may default on its loans. The Congressional Budget Office is expected to release its projection later this week, and Treasury Secretary Scott Bessent has told reporters he’ll release his calculations in May.
What is the debt ceiling and what does it mean to default on loans?
The debt limit is the total amount of money the federal government is authorized to borrow in order to pay off existing obligations, tax refunds, interest on the national debt, and other payments, according to the Treasury Department.
When the Treasury reaches the debt ceiling, lawmakers must pass legislation to raise or suspend the limit to avoid a default. If the country defaulted — in other words, failed to make those minimum payments — it could cause severe consequences for the national and global economies.
Once the debt limit is reached, the Treasury secretary can implement “extraordinary measures” as a safety cushion to allow for normal operations without risking default. How long those temporary measures will last depends on the current rate of revenue and spending, making it hard to predict an exact date for when money will run out, which is why it’s referred to as the X-date.
Congress most recently suspended the debt ceiling in the summer of 2023 when lawmakers passed the Fiscal Responsibility Act, punting the deadline until Jan. 1, 2025. The Treasury Department later announced on Jan. 21 it would begin utilizing extraordinary measures to avoid default until the ceiling could be raised.
Congress has consistently acted on raising the debt limit ahead of projected defaults. Since 1960, lawmakers have passed 78 pieces of legislation to “permanently raise, temporarily extend, or revise the definition of the debt limit,” according to the House Budget Committee.
Forty-nine of those instances occurred under a Republican president and 29 under a Democratic president.
What are the options to raise the debt limit this time around?
House Republican leaders are plowing ahead with plans to raise the debt limit through Trump’s reconciliation bill, which will rely on only GOP votes to pass the House and Senate.
Republicans included a provision to raise the debt ceiling in the House package as a way to strip Democrats of the chance to use the impending deadline as leverage to attach some of their own policies.
However, if Republicans choose to go the reconciliation route to raise the debt ceiling, they must get the package through both chambers of Congress and on Trump’s desk before the projected X-date — which will be a heavy lift.
The budget resolution narrowly passed the House in a dramatic vote last month. And Senate leaders have still not taken up the legislation after some Republicans posed certain changes.
For example, Senate Majority Leader John Thune, R-S.D., has openly suggested making the tax cuts permanent rather than just extending them over the next decade. If that change is made, the resolution would need to be passed again by the House — which was no easy feat the first time around.
House GOP leaders have pressured the Senate to take up the resolution as-is, arguing there is no time to waste to advance Trump’s policies.
“We took the first step to accomplish that by passing a budget resolution weeks ago, and we look forward to the Senate joining us in this commitment to ensure we enact President Trump’s full agenda as quickly as possible,” the top four House Republican leaders said in a joint statement on Monday. “The American people gave us a mandate and we must act on it. We encourage our Senate colleagues to take up the House budget resolution when they return to Washington.”
Congress could explore standalone bill if reconciliation is delayed
If Republicans can’t get their reconciliation bill through in time, they would need to address the debt limit through a standalone bill, which could require Democratic support.
About a dozen GOP senators and another 49 House Republicans have never voted for a law to raise the debt ceiling, according to data collected and analyzed by the Congressional Research Service.
Because Republicans hold slim majorities in the House and Senate, GOP leaders would need to rely on Democrats if those holdouts remain opposed to increasing the debt limit — giving the minority party some leverage in negotiations.
It’s not clear if Democratic leaders will work with Republicans on a backup plan to raise the debt limit if the GOP’s reconciliation package hits a wall. It’s also unclear if Democrats would want to help the Trump administration avoid a default as they accuse the president of driving up the debt.
“The economic agenda for Trump and Republicans is about running up the debt and inflicting pain on working families to make billionaires like Elon Musk even wealthier,” Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said in a statement. “Democrats should not make their job any easier by helping them raise the debt ceiling.”