That’s a potentially worrying sign for bond market watchers and the broader economy if the trend continues. Most estimates show the US running out of funds to cover all of its obligations on time in the late summer or early fall, but some forecasters have also warned weak revenue intake could mean a breach as soon as late May or June.
The US Treasury’s cash balance dropped to $281 billion on Thursday, according to the latest data from the department. Beyond that stockpile, it had, as of March 26, only $207 billion of so-called extraordinary measures left to continue to fulfill its financial obligations.
Tumult in Washington — cuts in the ranks of Internal Revenue Service agents spurred by Elon Musk’s Department of Government Efficiency, along with a tariff campaign that’s damaging consumer and business sentiment — could be contributing to lower-than-predicted tax collections, experts said.
The Congressional Budget Office on Wednesday warned about the potential for an earlier-than-anticipated debt ceiling breach, saying its baseline X-date estimate is for August or September, but noted that, if the government’s borrowing needs are significantly greater than projected, the Treasury’s resources could run out as early as late May.
So far this year, IRS receipts are coming in slower than projected. Filing season statistics show that the number of returns the agency has received is down 1.1%, compared with a similar time frame for 2024. Tax payments tend to spike in the final weeks before April 15 as filers who owe wait as long as possible to send in their money. As for refunds, however, the total is 4.6% higher than last year.