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US will breach debt ceiling between July and October unless Congress acts, forecasters warn

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The U.S. is most likely to default on its $36 trillion national debt sometime between mid-July and early October if Congress doesn’t act, the Bipartisan Policy Center predicted Monday.

On Capitol Hill, the trusted forecast from the nonpartisan think tank is crucial to the GOP’s legislative agenda. Republican leaders are now trying to decide whether to increase the debt limit in their behemoth party-line package or to instead begin bipartisan negotiations with Democrats. Some Republican lawmakers have said they hope a debt limit forecast might inspire President Donald Trump to finally start focusing on the issue.

It’s the first public prediction of a range for the so-called X-date since the Treasury Department began deploying “extraordinary measures” to free up more cash after the debt ceiling was reinstated on Jan. 1. The new analysis is likely to quell concerns among some top lawmakers who previously warned that the U.S. could default on its debt as soon as May.

GOP leaders could use the fiscal cliff to heighten the urgency to pass the party-line package they hope to enact this year to extend trillions of dollars in tax breaks, along with hundreds of billions of dollars in new border security and military spending. Trying to handle the debt limit through the party-line process could also complicate top Republicans’ efforts to build support around the package, since many fiscal conservatives are reluctant to vote for increasing U.S. borrowing authority.

Debt limit forecasters are expected to release a narrower X-date prediction after most tax receipts have landed at the IRS in April. While it’s “quite unlikely,” there is still a possibility that the U.S. could run out of borrowing power in early June if that gush of tax revenue comes in far below projections, the Bipartisan Policy Center cautioned.

The cost-cutting efforts of the Department of Government Efficiency effort headed by Elon Musk could also affect cashflow enough to change the X-date prediction, along with the strength of the economy, tariffs and any new spending or cuts Congress approves, the center said.

Besides regular tax season, there are several other points in the calendar year when a substantial amount of cash is freed up. That includes quarterly tax receipts in mid-June, which produce tens of billions of dollars from corporations and self-employed people, along with a move the Treasury Department can make in late June to extract more borrowing power from a key federal retirement fund, followed by another quarterly tax deadline in mid-September.

Congress’ nonpartisan scorekeeper, the Congressional Budget Office, plans to release its debt limit forecast on Wednesday. Treasury Secretary Scott Bessent has told lawmakers he plans to send his own projection in the first half of May.

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Congress

GOP, Democrats blast Vought for holding back cash: ‘You don’t have the authority to impound’

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Senators from both parties chided the Trump administration Thursday for continuing to withhold funding Congress has approved, more than a year after the White House first froze billions of dollars for temporary “review.”

During White House budget director Russ Vought’s testimony before the Senate Budget Committee, Sen. Chuck Grassley (R-Iowa) scolded the OMB chief for not sending hundreds of millions of dollars the Trump administration is supposed to give states throughout the year to support community services aimed at reducing poverty.

“Congress has appropriated money, and you don’t have the authority to impound it,” Grassley said about the more than $810 million Congress appropriated this year for the Community Services Block Grant program.

That program helps states fund anti-poverty services such as transportation, education and nutrition assistance that serve more than 9 million people each year.

Grassley told Vought that lawmakers “are not getting any answers” as to why the Trump administration hasn’t sent states their quarterly funding from the program. “I want those quarterly allotments released,” Grassley said.

While Vought did not directly address Grassley’s comments, he said at a different point during the hearing that “we have not impounded a single thing.”

Other senators, including Sen. Mark Warner (D-Va.), lamented federal dollars being withheld for the fund that provides capital to small banks and credit unions in underserved areas. For months lawmakers from both parties have pushed back against Trump’s plans to eliminate that program, the Treasury Department’s Community Development Financial Institutions Fund.

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Congress

FISA extension vote delayed

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House GOP leaders are pushing back the planned 3:15 p.m. procedural vote related to the bill extending a key spy power due to expire in four days.

Leaders are continuing to negotiate with hard-liners to come up with a deal that can pass the chamber.

No new time has been set for the rule vote.

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Congress

Senate Republicans ‘syncing’ immigration funding plan with House GOP

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Senate Majority Leader John Thune said Thursday that GOP leaders want to make sure Republicans in both chambers are aligned as they move ahead with a party-line plan for immigration enforcement funding.

The South Dakota Republican told reporters he hopes the Senate will adopt a budget framework “by middle-to-the-end of next week,” the first step to unlocking the filibuster-skirting power to clear a package of up to $75 billion for ICE and Border Patrol.

Then ideally the House would adopt the Senate budget measure without changes, Thune said, allowing Republicans to move on to passage votes on a final bill to fund the immigration enforcement agencies.

“We’re communicating as much as we can, making sure that we’re syncing this up and doing it in the way that meets the requirements that both bodies have,” Thune said Thursday, following a meeting Wednesday with Speaker Mike Johnson for a routine check-in.

The attempt at GOP unity comes after House Republicans hotly rejected the Senate’s proposal last month to fund most of the Department of Homeland Security, where funding lapsed more than two months ago. Now several House GOP lawmakers are also insisting Republicans fund all of the department through the party-line budget reconciliation process — not just the immigration agencies Democrats won’t support without new rules on the Trump administration’s immigration enforcement tactics.

Senate Budget Chair Lindsey Graham (R-S.C.) told reporters Thursday afternoon that he hopes to release text of the budget framework in short order.

“We’re working on all that. Hopefully we’ll find consensus here soon. But I think we’re getting close,” he said.

“I hope we can get moving on it as early as next week,” Graham added.

Senate Republicans have started talking to their chamber’s parliamentarian as they seek to enact the party-line package — one piece of their two-part plan to end the DHS shutdown that began in mid-February.

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