US faces 'significant risk' of debt default by June 15

High-level meeting between Joe Biden and US House Speaker cancelled

Failure to reach a deal would lead to a delay on payments for some government activities and/or a potential default. AP

There is a “significant risk” that the US could default on its debt by June 15 if Congress fails to strike a deal to raise the debt ceiling, the non-partisan Congressional Budget Office said on Friday.

The statement from the CBO brings the “X-Date”, the day on which the Treasury will run out of money, in line with Treasury Secretary Janet Yellen's projection.

The current debt limit is $31.4 trillion.

The CBO says failure to reach a deal would lead to a delay on payments for some government activities and/or a potential default, which would have disastrous effects on the economy.

The White House and Republicans in Congress remain at loggerheads over debt-ceiling negotiations.

President Joe Biden is pushing for a debt-ceiling raise without conditions, while Republicans are looking to press for a debt-limit increase that would include spending cuts.

Mr Biden was scheduled to have a second meeting this week with House Speaker Kevin McCarthy and other congressional leaders on the debt ceiling, although that was cancelled.

The International Monetary Fund on Thursday warned of severe consequences should the US default.

“Our assessment is that there would be very serious repercussions not only for the US but also for the global economy should there be a US debt default,” said IMF communications director Julie Kozack.

Agence France-Presse contributed to this report