Debt Limit Forecast Adds Pressure to GOP House-Senate Budget Negotiations

The Congressional Budget Office on Wednesday released a stark forecast of when the government’s borrowing limit would be exhausted—increasing the urgency of congressional Republicans’ budget negotiations. 

The forecast warns that if the government doesn’t raise the limit of its debt, then it will no longer be able to borrow money and pay its obligations.

“CBO estimates that if the debt limit remains unchanged, the government’s ability to borrow using established ‘extraordinary measures’ will probably be exhausted in August or September 2025,” the office’s summary says.

Although the forecast gives Republicans a few months to put a plan together, it renews pressure for the GOP leadership to get their party behind a debt ceiling increase.

House Speaker Mike Johnson, R-La., has previously said he hopes to pass a budget reconciliation bill by Memorial Day, which this year falls on May 26.

 If the government’s borrowing ability is exhausted, then it “will be unable to pay all of its obligations,” the CBO report asserts. It adds that the Treasury’s resources could be exhausted in “late May or sometime in June” if government spending outpaces CBO estimates.

In a statement to The Daily Signal, House Majority Whip Tom Emmer, R-Minn., emphasized his support of a debt ceiling increase in budget reconciliation.

“President [Donald] Trump has been clear: The debt ceiling must be addressed to prevent [Senate Minority Leader Chuck Schumer, D-N.Y.] from holding our economy hostage. House Republicans’ budget resolution achieves this, and we will continue to advocate for the House’s position throughout negotiations,” Emmer’s statement said.

“We’ve been saying that from the very beginning,” Johnson said Tuesday to a reporter who asked about including a new debt ceiling in the reconciliation bill. 

“Of course, it’s included in our reconciliation, and it sounds like Senate Republicans are coming around on that as well. So, that’s a good development.”

Senate Majority Leader John Thune, R-S.D., has also backed the debt limit increase.

But hiking the debt limit could create problems within Republicans’ narrow majorities in Congress. 

Sen. Rand Paul, R-Ky., a fiscal hawk, said Tuesday of the proposed debt ceiling increase, “They’ve lost me,” adding: “There will be other conservatives who they will lose … and the whole thing goes down.”

Sen. Ron Johnson, R-Wis., who has repeatedly advocated for lower spending levels than those in the House’s budget plan, told reporters that he wants to use the need for a debt ceiling increase as leverage to shape the bill more to his liking.

“We’ve got to keep that leverage, because obviously, people in my own party aren’t serious about a reasonable spending level,” he said.

Nevertheless, leadership is making optimistic statements about budget negotiations.

Thune told reporters after his meeting with Johnson that they had had “a very constructive, productive conversation” and that they were “homing in on these final issues we have to decide.”

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