The Big Story 

The federal government risks defaulting on its debt sometime this summer or early fall without action to address its debt ceiling, according to the Bipartisan Policy Center (BPC).

© AP

BPC projected the “X-date” will “most likely occur between August 15 and October 3” if Congress fails to act.

“Congress must address the debt limit ahead of the August recess,” said Margaret Spellings, president and CEO of the Bipartisan Policy Center, in a Wednesday statement. “With so many Americans worried about their own budgets and the state of the economy, Congress can’t afford to inject any additional uncertainty into the mix.”

“They need to act soon to prioritize our nation’s financial stability and reassure global markets that we take this responsibility seriously,” Spellings added.

While it’s difficult to pinpoint a hard X-date, projections become more precise the closer the government arrives to running out of cash. 

The debt limit, which caps how much money the Treasury Department can owe to pay the country’s bills, was last suspended in 2023 as part of a bipartisan deal that staved off the threat of national default through early 2025.

The national debt stands at more than $36 trillion.

The Treasury Department has been implementing “extraordinary measures” to buy time for Congress to address the debt ceiling.

Aris Folley has more here.

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Tax Watch 

GOP makes progress on SALT, but no deal yet

It’s crunch time for negotiations over the state and local tax (SALT) deduction cap.

After a high-stakes meeting with Treasury Department Secretary Scott Bessent on Wednesday, House Republicans in the SALT Caucus and a key GOP senator reported “progress” but no deal, leaving one of the thorniest issues in the party’s tax and spending bill unresolved.

Stakeholders say talks have zeroed in on keeping in place the $40,000 deduction cap — which the SALT Caucus negotiated in the House — but lowering the $500,000 income threshold and adjusting the numbers for inflation, a compromise of sorts that would appease moderate House Republicans while also placating Senate conservatives.

The clock, however, is ticking: Senate GOP leaders are hoping to put their version of the “big, beautiful bill” on the floor by Friday — officially kicking off the consideration process — but can’t move forward without a SALT deal.

— Read more here from Mychael Schnell and Al Weaver.

Tax Watch is a regular feature focused on the fight over tax reform and extending the 2017 Trump tax cuts this year. Email a tip

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