May 2023

CBO projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.

Over recent decades, corporate economic profits have grown faster than the amounts that corporations pay in federal taxes. CBO examined the factors that explain why corporate tax payments have not grown with corporate economic profits.

The federal budget deficit was $928 billion in the first seven months of fiscal year 2023, CBO estimates—$568 billion more than the shortfall recorded during the same period last year.

Because tax receipts through April have been less than CBO anticipated in February, the agency now estimates that there is a significantly greater risk that the Treasury will run out of funds in early June if the debt ceiling is unchanged.