The Federal Reserve in Washington
The Federal Reserve in Washington. The CBO projects higher unemployment, slow exit from inflation Image Credit: Reuters

Washington: The US Treasury Department will run out of ways to meet its debt obligations sometime in the period of July-September unless the nation's $31.4 trillion borrowing limit is raised or suspended before then, the non-partisan Congressional Budget Office estimated on Wednesday.

The CBO added that the exact timing of problems servicing government debt would depend in large part upon the pace of income tax receipts in April. It said in a report that the potential for a debt default could come before July if those receipts fall short of expectations and the debt ceiling is not raised.