WEST PALM BEACH, Fla. — The U.S. Treasury could soon exhaust its emergency measures to prevent a debt default, which would affect Americans who rely on benefits such as Medicare, Medicaid and Social Security.
According to the Congressional Budget Office, the U.S. Treasury will exhaust its emergency measures to prevent a debt default sometime between July and September unless Congress raises the $31.4 trillion debt limit.
"If the U.S. government defaults, which is very unlikely, but if it does, you could have very bad effects for almost everybody in the community," Noah Rubin with Wells Fargo Advisors in Boca Raton told WPTV. "Are you receiving Medicare or Medicaid health benefits? You might not be able to have that surgery or go to the doctor that you need to see temporarily. Are you receiving Social Security benefits?"
It would affect people like Cynthia Harte, who WPTV spoke with in January.
She was facing eviction due to a rent increase that came shortly after her mother passed away.
"The rent was paid. It took my mom's Social Security check and my Social Security disability check to pay the whole thing," Harte said.
That's her sole income.
"What happens if you can't receive those?" Rubin said. "The government should increase or suspend the debt limit, and they should attach to that certain messages that address how to lower the debt going forward."
The latest projection from the Congressional Budget Office (CBO) notes that the final "X" date, so to speak, will be determined by tax revenues the IRS receives in April. So, all eyes will be on Congress next month.
"We've been talking about inflation and rising rates, this will just compound that even more," Rubin said.
According to CNBC, the CBO also revised its projection for the size of the annual federal budget deficit over the next decade. The agency now believes the deficit will total $18.8 trillion over the next 10 years, a figure that is 20% higher than the $15.7 trillion that the agency estimated last May.
The U.S. reached the current debt limit in January of this year, at which point Treasury Secretary Janet Yellen initiated a series of established steps, known as the "extraordinary measures," that allowed the government to continue borrowing money to meet its obligations.
Should those measures be exhausted before President Joe Biden can sign off on a new debt limit passed by Congress, "the government would have to delay making payments for some activities, default on its debt obligations, or both," CBO director Phillip Swagel said in a statement last month.