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.
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House GOP Conference Chairwoman Lisa McClain, R-Mich., rebuked a school board in Richmond, Michigan, after some of its members tried to remove a conservative colleague for missing meetings while on military deployment to the Middle East.
Ray Stier, who received an American flag and a copy of the Congressional Record from McClain on Thursday as a commendation of his work, had been on deployment, attending board meetings remotely, but eventually lost virtual access.
That’s when the board called for his removal, citing a “disservice” caused by his absence.
“One of the board members’ family was taking to social media and putting out misinformation about myself and my wife and things that were not factually accurate and then ultimately calling for my resignation and prompting others to reach out to the district to call for my recall,” Stier recounted.
PARENTS SAY THEY’RE RUNNING FOR LOCAL SCHOOL BOARDS TO FIGHT ‘POISONOUS’ CRITICAL RACE THEORY
House GOP Conference Chairwoman Lisa McClain, R-Mich., left, pictured alongside Ray Stier, a school board member in Richmond, Michigan. (Andrew Harnik/Getty Images; office of Lisa McClain)
The moment is just the most recent clash between Republicans and school boards over policies that, in their view, are gatekeeping schools against diversity of thought and accountability.
“I think education is extremely important and vital,” McClain told Fox News Digital.
“And educators and administrators need to teach children how to think, not what to think. It’s about time that administrators begin to get held accountable for their actions. Good actions and bad actions.”
McClain’s meeting with Stier comes on the heels of a congressional hearing last week where she grilled a superintendent from Virginia over student privacy policy, probing if those policies were being unevenly applied to favor transgender students.
VIRGINIA SCHOOL DISTRICT SLAPPED WITH COMPLAINT ALLEGING NEW CLAIMS IN VIRAL TRANS LOCKER ROOM FIGHT
Rep. Lisa McClain, R-Mich., leaves a House Republican Conference meeting at the Capitol Hill Club on Feb. 28, 2023. (Tom Williams/ CQ Roll Call via Getty Images)
“The victims got a 10-day suspension and the biological female that did the filming got a one-day suspension,” McClain said, referring to an incident at Stone Bridge High School in Loudoun County where students had been reprimanded for filming in a locker room.
“How does that make sense?”
In Stier’s case, McClain questioned whether the board had targeted Stier on account of just his deployment overseas. Stierhad clashed with the board after learning that some of the district’s bathroom policies would have allowed fourth-grade students to use the same bathroom as transgender eighth-grade boys.
“Prior to him filling the seat, the seat was open for two months,” McClain observed. So that logical argument doesn’t exactly make sense to me; it doesn’t really hold a lot of water.”
MICHIGAN PARENT WANTS TRUMP TO ACT AFTER DAUGHTER SHARES LOCKER ROOM WITH TRANS-ATHLETE
House GOP Conference Chairwoman Lisa McClain, R-Mich., left, pictured alongside Richmond, Michigan school board member Ray Stier right. (Office of Lisa McClain)
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For his own part, Stier believes his case will refocus attention on the importance of the school board and its membership.
“My goal is to continue being an advocate for the community. One of the good things that I think came out of this was that it got so much attention that some of the community members who were unaware of the dynamics that were not being brought to light,” Stier said.
California’s political watchdog commission on Thursday finalized a $31,500 fine against Gov. Gavin Newsom, alleging that the Democratic leader failed to report three dozen behested payments totaling $5.5 million mostly to support wildfire recovery by the deadline under state law.
The Political Reform Act requires elected officials to disclose payments of $5,000 or more that they solicit or direct others to give to a charitable, legislative or governmental purpose within 30 days.
The California Fair Political Practices Commission said 34 of the violations were for failing to report on time that Newsom and his staff directed outreach from companies and foundations that wanted to help after the Los Angeles wildfires to the California Fire Foundation. The nonprofit was started in 1987 by the California Professional Firefighters to support the families of fallen firefighters and communities impacted by fire.
The donations include $1 million from the Chuck Lorre Foundation and $500,000 apiece from Lockheed Martin, the Anthem Blue Cross Foundation and BlackRock, among others gifts.
The governor also failed in 2024 to report on time two behested payments, totaling $100,000 from the Schmidt Family Foundation and Schwab Charitable Funds to the Institute for Local Government, a nonprofit within the League of California Cities.
The commission said the governor reported all of the payments “prior to public discovery” or contact from its enforcement division, which it considered a mitigating factor. Newsom also signed the stipulation and agreed to the fine.
Tara Gallegos, a spokesperson for Newsom’s office, said the issue involved late paperwork at a time when the governor’s staff was focused on emergency response and supporting survivors. She also underscored the fact that the reports were filed before he was contact by the FPPC.
Gallegos said the fine is unrelated to an alleged investigation into the governor and his wife by the Department of Justice, which Newsom announced this week.
Newsom alleged Monday that Trump is using the government as a political weapon to target him and his wife, Jennifer Siebel Newsom. Newsom announced the investigation after he learned that the FBI and Internal Revenue Service asked his associates questions about nonprofits and businesses related to the couple.
The governor’s office characterized the investigation as a fishing expedition. The Trump administration declined to comment.
A source familiar with the matter, who requested anonymity because they were not authorized to discuss it publicly, said two federal probes have been going on for about a year, and that they originated not from Washington, D.C., but from conversations between whistleblowers and federal prosecutors based in Sacramento. The probes are linked to Newsom’s former chief-of-staff, Dana Williamson, and Siebel Newsom’s taxes, the source said.
The FPPC violations mark the second time Newsom has reported payments late, which increased his penalty for the new infractions. The commission fined Newsom in 2024 for failing to timely report 18 payments totaling $14.4 million.
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