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Mon Jul 8, 2019, 09:04 PM

New Report: US Government Faces Potential Default In Sept.


By ANDREW TAYLOR

WASHINGTON (AP) — Lower than expected tax revenues now mean there is a “significant risk” that the federal government will run out of borrowing authority in the early part of September, according to a new analysis by the Bipartisan Policy Center, a Washington think tank and advocacy group.

The report adds urgency to Washington budget and debt talks that have yet to go anywhere.

The main culprit is that tax revenues are persistently weaker than anticipated, said Shai Akabas, the group’s economic policy director, growing by 2% to 3% instead of the 5% to 6% anticipated earlier. The group, which has had a good track record in prior estimates, said two months ago that policymakers had until at least October before the threat of default.

Also Monday, the Congressional Budget Office estimated that the government posted a budget deficit of $746 billion for the first nine months of fiscal year 2019, on track to approach or top $1 trillion. Revenues were $69 billion higher and federal spending was $208 billion higher over that period.

The new estimate echoes warnings from Treasury Secretary Steven Mnuchin, who is the lead Trump administration negotiator in talks on a bipartisan deal to lift the government’s borrowing cap and prevent automatic budget cuts from hitting the Pentagon and domestic agencies.

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https://apnews.com/2621c91174574ef4b0d063037baffdf5

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