After winning the 2024 presidential election, Donald Trump called for the United States’ debt ceiling to either be paused or eliminated. But the debt ceiling, two months into Trump’s second presidency, remains. And the Bipartisan Policy Center is warning that the U.S. will default on its $36 trillion national debt sometime between mid-July and early October if Congress doesn’t act.
In an opinion column published on March 26, MSNBC’s Hayes Brown details the role that the Elon Musk-led Department of Government Efficiency (DOGE) could play in a debt ceiling default.
“Now, the debt ceiling deadline is looming,” Brown explains, “but no one in Congress or the White House seems particularly worried about it. Indeed, the Department of Government Efficiency’s hack-and-slash tactics and congressional infighting may have brought the default date closer. If default does happen, the economic fallout would be more likely to trigger a massive recession than the ‘Golden Age’ that Trump has promised…. At some point, on a day ominously known as the ‘X Date,’ the U.S. government will be unable to borrow more money to cover its existing bills.”
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The MSNBC columnist continues, “With the full faith and credit of the United States no longer an ironclad guarantee, the resulting default would wreak havoc on the financial markets.”
The Internal Revenue Service (IRS) is among the many federal government agencies that the Trump Administration and DOGE are targeting for mass layoffs.
Brown notes that the Bipartisan Policy Center warned, “If collections from tax season fall far short of expectations, there is a potential for heightened X Date risk in early June.”
The MSNBC columnist argues, “Here’s the thing, though: While the Bipartisan Policy Center called a revenue shortfall ‘quite unlikely,’ the odds this year are higher than might otherwise be the case. The Washington Post reported last week that ‘Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024.’ That would be equal to about $500 billion in missing revenue, or over half of the entire government’s nondefense discretionary spending…. There are a few likely reasons for the reduced tax revenue, including the destruction Trump and Musk have caused inside the IRS since January.”
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Brown adds, “While the staffing cuts under discussion wouldn’t be implemented until the April 15 tax filing deadline, almost 20 percent of IRS workers could be fired in the month after it…. Congress will have to deal with this issue before an unprecedented default devastates any confidence in the American economy. The only certain thing is that Trump won’t make it easy to avoid catastrophe.”
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Hayes Brown’s full MSNBC column is available at this link.
