Politics
U.S. Could Run Out of Cash by July, Analysis Finds
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 on 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.
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 Mr. 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 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.
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.
President 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. Mr. 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, Mr. Bessent said that he was continuing to deploy the measures set in motion by Ms. 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,” Mr. 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.
Politics
Video: Fed Chair Responds to Inquiry on Building Renovations
new video loaded: Fed Chair Responds to Inquiry on Building Renovations
transcript
transcript
Fed Chair Responds to Inquiry on Building Renovations
Federal prosecutors opened an investigation into whether Jerome H. Powell, the Federal Reserve chair, lied to Congress about the scope of renovations of the central bank’s buildings. He called the probe “unprecedented” in a rare video message.
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“Good evening. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead, monetary policy will be directed by political pressure or intimidation.” “Well, thank you very much. We’re looking at the construction. Thank you.”
By Nailah Morgan
January 12, 2026
Politics
San Antonio ends its abortion travel fund after new state law, legal action
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San Antonio has shut down its out-of-state abortion travel fund after a new Texas law that prohibits the use of public funds to cover abortions and a lawsuit from the state challenging the city’s fund.
City Council members last year approved $100,000 for its Reproductive Justice Fund to support abortion-related travel, prompting Texas Attorney General Ken Paxton to sue over allegations that the city was “transparently attempting to undermine and subvert Texas law and public policy.”
Paxton claimed victory in the lawsuit on Friday after the case was dismissed without a finding for either side.
WYOMING SUPREME COURT RULES LAWS RESTRICTING ABORTION VIOLATE STATE CONSTITUTION
Texas Attorney General Ken Paxton claimed victory in the lawsuit after the case was dismissed without a finding for either side. (Hannah Beier/Bloomberg via Getty Images)
“Texas respects the sanctity of unborn life, and I will always do everything in my power to prevent radicals from manipulating the system to murder innocent babies,” Paxton said in a statement. “It is illegal for cities to fund abortion tourism with taxpayer funds. San Antonio’s unlawful attempt to cover the travel and other expenses for out-of-state abortions has now officially been defeated.”
But San Antonio’s city attorney argued that the city did nothing wrong and pushed back on Paxton’s claim that the state won the lawsuit.
“This litigation was both initiated and abandoned by the State of Texas,” the San Antonio city attorney’s office said in a statement to The Texas Tribune. “In other words, the City did not drop any claims; the State of Texas, through the Texas Office of the Attorney General, dropped its claims.”
Texas Attorney General Ken Paxton said he will continue opposing the use of public funds for abortion-related travel. (Justin Lane/Reuters)
Paxton’s lawsuit argued that the travel fund violates the gift clause of the Texas Constitution. The state’s 15th Court of Appeals sided with Paxton and granted a temporary injunction in June to block the city from disbursing the fund while the case moved forward.
Gov. Greg Abbott in August signed into law Senate Bill 33, which bans the use of public money to fund “logistical support” for abortion. The law also allows Texas residents to file a civil suit if they believe a city violated the law.
“The City believed the law, prior to the passage of SB 33, allowed the uses of the fund for out-of-state abortion travel that were discussed publicly,” the city attorney’s office said in its statement. “After SB 33 became law and no longer allowed those uses, the City did not proceed with the procurement of those specific uses—consistent with its intent all along that it would follow the law.”
TRUMP URGES GOP TO BE ‘FLEXIBLE’ ON HYDE AMENDMENT, IGNITING BACKLASH FROM PRO-LIFE ALLIES
Texas Gov. Greg Abbott signed a law in August that blocks cities from using public money to help cover travel or other costs related to abortion. (Antranik Tavitian/Reuters)
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The broader Reproductive Justice Fund remains, but it is restricted to non-abortion services such as home pregnancy tests, emergency contraception and STI testing.
The city of Austin also shut down its abortion travel fund after the law was signed. Austin had allocated $400,000 to its Reproductive Healthcare Logistics Fund in 2024 to help women traveling to other states for an abortion with funding for travel, food and lodging.
Politics
California Atty. Gen. Rob Bonta opts against running for governor. Again.
California Atty. Gen. Rob Bonta announced Sunday that he would not run for California governor, a decision grounded in his belief that his legal efforts combating the Trump administration as the state’s top prosecutor are paramount at this moment in history.
“Watching this dystopian horror come to life has reaffirmed something I feel in every fiber of my being: in this moment, my place is here — shielding Californians from the most brazen attacks on our rights and our families,” Bonta said in a statement. “My vision for the California Department of Justice is that we remain the nation’s largest and most powerful check on power.”
Bonta said that President Trump’s blocking of welfare funds to California and the fatal shooting of a Minnesota mother of three last week by a federal immigration agent cemented his decision to seek reelection to his current post, according to Politico, which first reported that Bonta would not run for governor.
Bonta, 53, a former state lawmaker and a close political ally to Gov. Gavin Newsom, has served as the state’s top law enforcement official since Newsom appointed him to the position in 2021. In the last year, his office has sued the Trump administration more than 50 times — a track record that would probably have served him well had he decided to run in a state where Trump has lost three times and has sky-high disapproval ratings.
Bonta in 2024 said that he was considering running. Then in February he announced he had ruled it out and was focused instead on doing the job of attorney general, which he considers especially important under the Trump administration. Then, both former Vice President Kamala Harris and Sen. Alex Padilla (D-Calif.) announced they would not run for governor, and Bonta began reconsidering, he said.
“I had two horses in the governor’s race already,” Bonta told The Times in November. “They decided not to get involved in the end. … The race is fundamentally different today, right?”
The race for California governor remains wide open. Newsom is serving the final year of his second term and is barred from running again because of term limits. Newsom has said he is considering a run for president in 2028.
Former Rep. Katie Porter — an early leader in polls — late last year faltered after videos emerged of her screaming at an aide and berating a reporter. The videos contributed to her dropping behind Riverside County Sheriff Chad Bianco, a Republican, in a November poll released by the UC Berkeley Institute of Governmental Studies and co-sponsored by The Times.
Porter rebounded a bit toward the end of the year, a poll by the Public Policy Institute of California showed, however none of the candidates has secured a majority of support and many voters remain undecided.
California hasn’t elected a Republican governor since 2006, Democrats heavily outnumber Republicans in the state, and many are seething with anger over Trump and looking for Democratic candidates willing to fight back against the current administration.
Bonta has faced questions in recent months about spending about $468,000 in campaign funds on legal advice last year as he spoke to federal investigators about alleged corruption involving former Oakland Mayor Sheng Thao, who was charged in an alleged bribery scheme involving local businessmen David Trung Duong and Andy Hung Duong. All three have pleaded not guilty.
According to his political consultant Dan Newman, Bonta — who had received campaign donations from the Duong family — was approached by investigators because he was initially viewed as a “possible victim” in the alleged scheme, though that was later ruled out. Bonta has since returned $155,000 in campaign contributions from the Duong family, according to news reports.
Bonta is the son of civil rights activists Warren Bonta, a white native Californian, and Cynthia Bonta, a native of the Philippines who immigrated to the U.S. on a scholarship in 1965. Bonta, a U.S. citizen, was born in Quezon City, Philippines, in 1972, when his parents were working there as missionaries, and immigrated with his family to California as an infant.
In 2012, Bonta was elected to represent Oakland, Alameda and San Leandro as the first Filipino American to serve in California’s Legislature. In Sacramento, he pursued a string of criminal justice reforms and developed a record as one of the body’s most liberal members.
Bonta is married to Assemblywoman Mia Bonta (D-Alameda), who succeeded him in the state Assembly, and the couple have three children.
Times staff writer Dakota Smith contributed to this report.
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