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When may the United States declare bankruptcy? Timeline of important events in the debt limit fight. Just days into a new session of the United States Congress, politicians are confronted with what may be the most important legislative issue of 2023: the national debt ceiling.
Here are some crucial moments to look out for in the next months:
1st of February
Next Monday, the Treasury Department will issue a quarterly report outlining how it intends to support the government for the next three months. The document, which includes details on the Treasury's upcoming debt issuance, may give insight on the timing of a prospective default. It comes after a more comprehensive breakdown of quarterly financing, which will be provided on January 30.
Analysts caution, however, that it will be far too early to narrow down a specific date, which will be determined by a variety of circumstances, including tax collections.
March-April
The Congressional Budget Office will provide fresh budget predictions for fiscal 2023 and fiscal 2024 in March or April, based on existing tax and expenditure laws and economic forecasts. The predictions will give a nonpartisan picture of government cash flows as well as more hints as to how long the Treasury will be able to pay its debts.
In addition, President Joe Biden is expected to release his fiscal year 2024 budget request in the second quarter. This happened in early March of last year.
The idea will be grain for any discussions with Republicans, who will almost certainly want considerable concessions in order to sign off on legislation lifting the debt ceiling.
April 18
The deadline for filing federal income tax returns is April 18. Data on government income might be a key component in establishing the so-called "X date," or the day when the government stops paying its obligations.
The more tax income the government collects, the longer it can pay its responsibilities.
June 5
Treasury Secretary Janet Yellen has designated June 5 as the earliest potential X date, citing the conclusion of a "debt issuance moratorium period" in implementing exceptional cash management measures.
Analysts widely believe, however, that the US will not default until a later date, and that the US Treasury is presenting Congress with the worst-case scenario.
June 30
If the US Treasury makes it to June 30 without missing any payments, it will receive a $145 billion respite when investments made by the Civil Service Retirement and Disability Fund mature.
Normally, these monies would be reinvested, but the Treasury Department has stated that the revenues might be used to assist make necessary payments.
July-October
Most analysts believe the genuine X date will fall between July and October.
In addition to upsetting global financial markets, failing to strike an agreement by the X date might result in certain government payrolls, Social Security benefits, and bond repayments being missed.
