By David Lawder
WASHINGTON, Feb 15 (Reuters) - The Congressional Budget
Office (CBO) on Wednesday will provide some clarity on when the
United States may default on its payment obligations if
lawmakers fail to raise the federal borrowing limit amid a tense
partisan spending stand-off.
The non-partisan fiscal referee agency's 2023 baseline
budget forecast also will reveal its first comprehensive
analysis of federal deficits in the wake of recent spending
legislation, including President Joe Biden's $430 billion
climate and healthcare act and a military-heavy $1.66 trillion
government funding package with more aid to Ukraine.
Those 10-year forecasts could enflame the debate over
spending in Congress and prompt calls for deeper cuts from
Republicans who now control the House of Representatives.
A second CBO report will describe the "current debt
situation and CBO's expectation about when the Treasury will no
longer be able to pay its obligations fully if the debt limit is
not raised."
After hitting the $31.4 trillion borrowing cap on Jan. 19,
Treasury Secretary Janet Yellen said the Treasury can keep up
payments on debt, federal benefits and make other outlays at
least through June 5 using cash receipts and extraordinary cash
management measures.
Some fiscal analysts say that Treasury can last further into
the summer, but the CBO forecast will provide a reliable
benchmark, said Shai Akabas, economic policy director at the
Bipartisan Policy Center, a centrist think tank in Washington.
"This will be a good-level set of the discussion because the
only point in time out there now is the June 5 reference in
Secretary Yellen's letter, which is not an X-date projection,"
Akabas said, using a common term in Washington for when the
Treasury will begin to default.
YEAR OF THE DEBT LIMIT
So far in 2023, not a day has gone by on Capitol Hill
without lawmakers jousting over the debt limit, as Democrats
press for a quick, clean increase in Treasury borrowing
authority and Republicans insist on first nailing down
significant reductions in future government spending.
Social Security and Medicare, the government's popular
pension and healthcare programs for the elderly, are at the
center of the debt limit/government funding debate, as both
parties also jockey to define the contours of the 2024
presidential and congressional campaigns.
"There has been a Republican drumbeat to cut Social Security
and Medicare," Senate Majority Leader Chuck Schumer, a Democrat,
reminded reporters on Tuesday.
Republican Leader Mitch McConnell has labored, without much
success so far, to smother such talk.
"Let me say one more time. There is no agenda on the part of
Senate Republicans to revisit Medicare or Social Security.
Period," he said at a press conference.
(Reporting by David Lawder; Additional reporting by Richard
Cowan; Editing by Leslie Adler)
david.lawder.thomsonreuters.com@reuters.net))
