US Federal Budget Deficit Rapidly Widening as Treasury Could Run Out of Cash Sooner Than Expected

Joshua Ramos
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Source: Coindesk

Bloomberg has reported that the US federal budget deficit is rapidly widening, as the treasury department could run out of cash sooner than expected. The latest estimates from the Congressional Budget Office have reportedly threatened how long the government can operate with a debt ceiling increase.

The report notes that US Treasury secretary Janet Yellen has already implemented, “special accounting maneuvers,” to cope with the ongoing issue. Moreover, she has already indicated that those measures may only keep the department from running out of cast until early June.

Source: Gallup News

US Debt Ceiling Debate Growing More Worrisome

Last month, the federal government reached an all-time high in national debt, surpassing the $31.4 trillion debt ceiling. Since then, the debate has become political, as both sides have lobbied to either implement a new budget or raise the debt ceiling entirely.

As those discussions are ongoing, with no headway being made on either side, the situation becomes more dire by the day. Now, it appears as though the US federal budget deficit is rapidly widening. A development that has threatened the treasury department from running out of cash before the previously stated June deadline.

Source – Wallpaper Flare

The Treasury hasn’t yet released its monthly budget, which typically arrives in the middle of the month. Conversely, Bloomberg notes that it reported a $421 billion deficit three months through December, which is 12% worse than in 2021.

If an agreement on raising the debt ceiling is not in place, the US government would be forced to enter debt default. Subsequently issuing severe consequences, with the plummeting value of the dollar being chief among them. Earlier today, House Republicans issued budget cuts that would support their raising of the debt ceiling. Although a lack of cooperation thus far shows the situation will likely get worse before it gets better.