The US could run out of money to pay its bills as soon as July if the debt ceiling isn't raised by then, the CBO projects

• The CBO projected the US could default on its debt as soon as July if the debt ceiling isn't raised by then.
• Previously, Treasury Secretary Janet Yellen said measures to keep the US funded would run out at some point this summer.

Congress just got a fresh warning on the need to act soon to raise the debt ceiling.

On Wednesday, the Congressional Budget Office (CBO) released a report outlining its economic projections for 2023 to 2033, and it shed light on a pressing issue lawmakers are facing: raising the debt ceiling and keeping the US on top of paying its bills. In January, Treasury Secretary Janet Yellen said the government has started using "extraordinary measures" to allow the country to continue affording its obligations, and she said those measures are expected to run out at some point this summer.

The CBO just gave some more clarity on the timeline to keep the US from default.

"We project that, if the debt limit remains unchanged, the government's ability to borrow using extraordinary measures will be exhausted between July and September 2023," the report said.

Currently, Republicans are in the process of negotiating a deal to raise the debt ceiling. After assuming a slim majority over the House, they expressed their intent to use raising the limit as leverage to achieve their own priorities, particularly in the form of major spending cuts.

Democrats and President Joe Biden have stressed that the process should be bipartisan and free of conditions — Republicans raised the ceiling three times under former president Donald Trump — but Speaker of the House Kevin McCarthy said he will continue negotiating with Biden and use raising the limit as an opportunity to reduce spending.

"Some of our Republican friends in the house were talking about taking the economy hostage over the full faith and credit of the United States," Biden said during a Wednesday speech on lowering the deficit. "They say, unless I accept their economic plans, which is totally irresponsible, they're not going to pay the national debt."

"I will not negotiate whether or not we pay our debt," Biden said. "I will not allow this nation to fail."

Defaulting on the nation's debt would be unprecedented, with severe economic consequences. Treasury Sec. Janet Yellen said on Tuesday that "the solution is simple: Congress must vote to raise or suspend the debt limit. It should do so without conditions, and it should not wait until the last minute."

"It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security," she said. "In the longer term, a default would raise the cost of borrowing into perpetuity. Future investments — including public investments — would become substantially more costly."

While it's unclear at this point what Republicans' next plan of action is, and what spending cuts they will put forth, McCarthy said the US won't default.

"Defaulting on our debt is not an option," he said earlier this month. "But neither is a future of higher taxes, higher interest rates, and an economy that doesn't work for working Americans."