In the past few months, various projections have estimated Congress has until sometime in the summer to pass legislation to avert a default by raising the debt limit. But some experts have raised questions in recent days over whether that timeline could be tightened to as soon as early June as tax season carries on.
In a recent analysis released by Moody’s Analytics, economists Mark Zandi and Bernard Yaros warn that April tax receipts ran at 35 percent lower than the previous year’s pace.
Zandi noted in an interview that it’s “not a surprise” the receipts are coming in at lower levels than last year — when the government saw a budget surplus of more than $300 billion in April 2022, according to estimates from the Congressional Budget Office (CBO). But he added receipts are “coming even weaker than” anticipated.
Economists at Goldman Sachs also noted in a report last week that, while they still pinpointed sometime in July for when the nation will meet the so-called “X-date,” the “odds of an early June deadline have edged up” when looking at non-withheld income tax receipts.
The economists warned then that if tax receipts continue to perform similarly in the days ahead, the “odds would tilt slightly in favor of an early June deadline.” But they also said non-withheld receipts were running “at a level that makes it a close call between early June and late July.”
Both reports caution that the Treasury could see another boost in non-withheld tax payments around a mid-June deadline, which could buy lawmakers more time. But experts are waiting for further data from the Treasury in the coming days for a better idea.
Aris has more in a full report at TheHill.com.
