According to the statement, this would cause the United States to default, which in turn would trigger financial plights, economic disruptions and speedy surges in borrowing ratings.

The warning came as the White House and congressional leaders spent the week in negotiations over how to raise the country’s $31.4 trillion borrowing cap.

The Treasury Department has been using accounting maneuvers known as extraordinary measures to keep paying the country’s bills without breaching that debt ceiling, which was officially reached on January 19, but its Secretary Yanet Yellen stated those tools could run out as soon as June 1.

“If the debt limit is not raised or suspended before the Treasury´s cash and extraordinary measures run out, the government will have to delay making payments for some activities, default on its debt obligations, or both,” the Congressional Budget Office said in a report cited by The New York Times.

It predicted that a default would lead to “distress in credit markets, disruptions in economic activity and rapid increases in borrowing rates for the Treasury.”

The day the United States runs out of cash — known as the X-date — could come later this summer. The budget office said that if the Treasury Department had sufficient funds to make it through June 15, an influx of quarterly tax receipts and additional extraordinary measures at its disposal would most likely allow the government to keep paying its bills through “at least the end of July.”

House Republican lawmakers, for example, passed a bill pushing for deep spending cuts and a reversal of the agenda promoted by President Joe Biden as a prerequisite for raising the debt ceiling.

Meanwhile, Democrats insist that conservatives must agree to an increase in the limit without strings attached.

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