Congress is on the clock to raise the debt ceiling

President Donald Trump addresses a joint session of Congress in the House chamber at the U.S. Capitol in March. Julia Demaree Nikhinson/ap

The clock is ticking for lawmakers to raise the nation’s debt limit to avert a default that could have catastrophic economic consequences as Republicans mull whether to include a provision to increase it in their party-line tax cuts and spending bill.

The Congressional Budget Office said the U.S. will hit the “X-date,” when the country would run short of funds to pay its bills, sometime between August and September. That outlook faces several uncertainties like weaker revenue than expected that could change the X-date to late May or early June. Another analysis recentlu released by the Bipartisan Policy Center estimates the U.S. will hit the X-date by mid-July.

The consequences of failing to raise the ceiling are astronomical and could cause the government to miss payments on its debt once it runs out of funds through the “extraordinary measures” the Treasury Department has been taking.

“Those actions could result in distress in credit markets, disruptions in economic activity, and rapid increases in borrowing rates for the Treasury,” CBO’s report said.

Despite the consequences, lawmakers have increasingly run closer to the deadline with standoffs over whether to raise it. The last standoff in 2023 led to Fitch downgrading the U.S. over a “steady deterioration in standards of governance.”

President Donald Trump has pushed Republicans in Congress to include a provision raising the debt ceiling in the reconciliation package being debated in the House and Senate, which would not require any Democratic votes to pass.

Leaders in both chambers has expressed openness to the idea but might face fierce resistance from budget hawks who are typically opposed to raising the limit without significant cuts to government spending.

“I don’t want to speak for the White House, but I think there’s consensus,” Senate Majority Leader John Thune told reporters Tuesday after a meeting at the White House.

Republicans in the House and Senate have been on separate paths to pass the reconciliation bill over the last two months, with the House pushing for a single bill while senators want to break the legislation into two pieces.

The House included a $4 trillion increase to the debt ceiling as part of its budget bill that cleared the chamber earlier this year.

“We took the first step to accomplish that by passing a budget resolution weeks ago, and we look forward to the Senate joining us in this commitment to ensure we enact President Trump’s full agenda as quickly as possible,” House Speaker Mike Johnson recently said in a statement.

But the uncertainty of the timing on the X-date and divisions over passing the reconciliation package could force the GOP to turn to Democrats for help raising the debt limit.

“This is where both parties feel a lot of discomfort around the debt ceiling and spending generally,” said David McLennan, a political science professor and director of the Meredith poll. “It’s going to be an interesting discussion between Democrats and Republicans, because for every Republican that pulls a hard line, that means another Democrats going to have to be on board to get the debt ceiling issue dealt with.”

The debate over the debt ceiling comes shortly after an internal battle that remains unresolved for Democrats over Senate Minority Leader Chuck Schumer’s handling of a government shutdown. Schumer voted to approve the GOP-led bill to avoid a shutdown along with nine other Senate Democrats, sparking outrage from within the party and some calls for him to step down in leadership.

Democrats have grown increasingly frustrated with their lack of ability to shape policy in the congressional minority and to combat the Trump administration. Some in the party hoped to use the looming shutdown to gain policy concessions out of Republicans.

But taking a hard line against the debt limit if Republicans cannot pass it on their own, which comes with tremendous potential costs to the economy, is a much bigger risk than a government shutdown. It’s not clear how hard Democrats will fight Republicans to try to pull concessions if the GOP is unable to raise the ceiling through reconciliation.

“This is the leverage they’ve got, maybe with the exception of the next big budget bill, this may be their best opportunity to try to extract something out of it. But the question is, Republicans know that the Democrats don’t want to tank the economy, so how much are they willing to give knowing that at least a number of Democrats are likely to come on board and protect the debt ceiling?” McLennan said.

Democrats have pushed Republicans to work across the aisle to raise the debt ceiling and urged them to negotiate.

“Let me be absolutely clear: the need to raise the debt ceiling must not be used as a pretext to deliver giveaways to billionaires or to undermine the essential programs on which working families rely. Democrats are ready to work across the aisle to prevent a catastrophic default. But Republicans must work with us to protect Social Security, Medicare, and Medicaid,” Rep. Brendan Boyle, top Democrat on the House Budget Committee, said in statement.

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