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U.S. Could Run Out of Cash by July, Analysis Finds

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The Bipartisan Policy Center estimates that the so-called X-date could fall between mid-July and early October if Congress does not lift or suspend the nation’s debt limit.The United States could run out of cash to continue paying its bills by mid-July if Congress does not take action to raise or suspend the nation’s debt limit, according to an analysis on Monday by the Bipartisan Policy Center.That deadline, known as the “X-date” — the moment when the United States is unable to meet its financial obligations and might default on its debt — is a fiscal milestone that’s among the most closely watched in Washington and on Wall Street.The date is subject to considerable uncertainty. It relies on estimates of how much wiggle room the Treasury has to use accounting maneuvers — known as “extraordinary measures” — to keep paying the government’s bills by shifting money around. The Bipartisan Policy Center, a think tank, provided estimates suggesting that the X-date could come as late as the beginning of October.Efforts to address the debt limit will likely consume Congress and the Trump administration later this year as Republicans race to enact trillions of dollars of tax cuts.The debt limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.Because the federal government runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. Those obligations include funding for social safety net programs, salaries for members of the armed forces and paying investors who have bought U.S. government debt in exchange for interest payments.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Latest Tariffs on Canada, Mexico and China Could Be His Biggest Gamble

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    President Trump has offered a mix of reasons for upending global trade relations, baffling and angering America’s biggest trading partners.President Trump made one of the biggest gambles of his presidency Tuesday by initiating sweeping tariffs with no clear rationale on imports from Canada, Mexico and China, triggering a trade war that risks undermining the United States economy.His actions have upended diplomatic relations with America’s largest trading partners, sent markets tumbling, and provoked retaliation on U.S. products — leaving businesses, investors and economists puzzled as to why Mr. Trump would create such upheaval without extended negotiations or clear reasoning.Mr. Trump has offered up a variety of explanations for the tariffs, saying they are punishment for other countries’ failure to stop drugs and migrants from flowing into the United States, a way to force manufacturing back to America and retribution for countries that take advantage of the United States. On Tuesday, he cited Canada’s hostility toward American banks as another reason.Canadian Prime Minister Justin Trudeau said it was difficult to understand Mr. Trump’s rationale for the tariffs but posited that his intent was to cripple Canada. “What he wants is to see a total collapse of the Canadian economy, because that’ll make it easier to annex us,” Mr. Trudeau said during a news conference on Tuesday. “That’s never going to happen. We will never be the 51st state.”Howard Lutnick, the commerce secretary, said Tuesday afternoon that the president might reach some sort of accommodation with Canada and Mexico and announce it on Wednesday. “I think he’s going to figure out, you do more, and I’ll meet you in the middle some way,” Mr. Lutnick said.Canada announced a series of retaliatory tariffs on $20.5 billion worth of American imports, and Mr. Trudeau said that other “non-tariff” measures were forthcoming.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Markets and Corporate America Are Unfazed by Washington Chaos, for Now

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    The federal budget debate has big implications for the economy. Businesses are betting that tax cuts will be extended and the math will work out.Even by Washington standards, the second Trump presidency has begun in frenetic fashion: mass firings at federal agencies, tariff threats against allies and foes alike, and haggling over how to get a Republican budget through a narrowly divided Congress.Business leaders and corporate investors are confident that things will turn out fine, at least for them. “Markets aren’t showing all that much concern,” Jason Pride, chief of investment strategy and research at the Glenmede Trust Company, noted.But that could change, with high-stakes implications for the markets and the U.S. economic outlook.Investors fully expect the tax cuts from President Trump’s first term, which mostly benefited businesses and the wealthy, to be fully extended before the end of the year. Trade groups including the Business Roundtable and the National Association of Wholesaler-Distributors are confident the extension will be taken care of — especially since not doing so “would impose, effectively, a tax increase,” Mr. Pride added.Still, the arithmetic remains tenuous. The cost of extending the tax cuts may total $4 trillion over 10 years. That means Congress is being left to barter over what else can save or raise money, and whose federal benefits might be cut.The bond market — where traders price the risk of both inflation and an economic downturn — has, for its part, shimmied off moments of worry brought on by Mr. Trump’s boomeranging style of negotiation over tariffs. The bet is that the threats of an import tax are more a geopolitical tool than a key revenue raiser, as the administration has portrayed the tariffs in budget discussions.Some of the underlying calm stems from Wall Street’s confidence in Treasury Secretary Scott Bessent. A billionaire hedge fund manager before assuming his new position, he has convinced many analysts that the ultimate suite of policies coming from the White House will be beneficial once it coalesces, and he “has also added to some optimism around lower deficits” in future budgets, according to Matt Luzzetti, the chief economist at Deutsche Bank.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Tariffs Threaten to Upend Global Economic Order

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    The invoking of national security to unravel trade agreements could scramble the international trading system in China’s favor.President Trump’s move this weekend to slap sweeping tariffs on Canada, Mexico and China is threatening to fracture the global trading system and a world economic order that once revolved around a U.S. economy that prized open investment and free markets.The speed and scope of the import duties that Mr. Trump unveiled in executive orders on Saturday prompted widespread criticism from many lawmakers, economists and business groups, who assailed the actions as economic malpractice. They warned that the tariffs, which were levied in response to Mr. Trump’s concerns about fentanyl smuggling and illegal immigration, could inflame inflation, cripple American industries and make China an even more powerful global trade hub.Mr. Trump on Sunday defended the tariffs while acknowledging that there could be some negative consequences.“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!),” he wrote on social media.The executive orders mean that on Tuesday at 12:01 a.m., all goods imported from Canada and Mexico will be subject to a 25 percent tariff, except Canadian energy products, which will face a 10 percent tariff. All Chinese goods will also face a 10 percent tariff.Canada and Mexico have vowed to retaliate swiftly with tariffs of their own, and China said it would pursue unspecified “countermeasures” to safeguard its interests.Speaking on NewsNation on Sunday, Mr. Trump’s senior trade adviser, Peter Navarro, said it was unlikely that the tariffs would be stopped at the last minute.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Federal Debt Is Now Worrying Even Progressives

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    Long a focus of conservatives, the level of public borrowing is starting to concern left-leaning economists. Proposed remedies still differ radically.The 119th Congress began, as it so often has in recent years, with calls from Republican politicians for wrestling down the national debt, which is near a record level relative to the size of the economy.But this time, the G.O.P. had company: Progressive economists and budget wonks, who have often dismissed finger-wagging about debt levels as a pretext for slashing spending on programs for the poor, are starting to ring alarm bells as well.What’s changed? In large part, long-term interest rates look unlikely to recede as quickly as had been hoped, forcing the federal government to make larger interest payments. And the Trump administration has promised to extend and expand its 2017 tax cuts, which will cost trillions if not matched by spending reductions.“I find it easier to stay calm about this threat when I think the interest rate is low and steady, and I think in the past year or so that steadiness has been dented,” said Jared Bernstein, who led the Council of Economic Advisers in the Biden administration. “If one party refuses to raise revenues, and the Democrats go along more than is fiscally healthy, that’s also a big part of the problem.”To be clear, conservative warnings on the debt have generally been met with little action over the past two decades. A paper by two political scientists and an economist recently concluded that after at least trying to constrain borrowing in the 1980s and 1990s, Republicans have “given up the pretense” of meaningful deficit reduction. Democrats and Republicans alike tend to express more concerns about fiscal responsibility when their party is out of power.Historically, the stock of debt as a share of the economy has risen sharply during wars and recessions. It peaked during World War II. In the 21st century, Congress has not managed to bring the debt back down during times of peace and economic growth.Revenues Are Not Keeping Up With Projected SpendingIf not addressed, debt will probably mount to unprecedented levels.

    Source: Congressional Budget OfficeBy The New York TimesSpending Has Been Creeping UpAs a share of economic output, mandatory outlays — mostly Medicare, Medicaid, and Social Security — are growing fastest. But as debt rises, so do interest costs.

    Source: Office of Management and BudgetBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Tariff Threat Pits Canada Against Mexico

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    If President-elect Donald J. Trump’s threat of hefty tariffs on Canada and Mexico was intended as a divide-and-conquer strategy, early signs show that it might be working.After his missive on Monday, in which he said he planned to impose a 25 percent tariff on all imports from both of the United States’ neighbors, Ottawa and Mexico City followed starkly different approaches.Mexico took a tough stance, threatening to retaliate with its own tariffs on U.S. goods. Canada, instead, emphasized that it was much closer aligned to the United States than Mexico.The trade agreement between the three North American nations has been carefully maintained over the past three decades through a delicate balance between the United States and its two key allies.As Mr. Trump prepares to take office, his willingness to tear that up to pressure the two countries on migration could open the door to the United States-Mexico-Canada agreement being replaced by separate bilateral deals with the United States.Chrystia Freeland, Canada’s finance minister, has tried to show that Canada is aligned with Mr. Trump’s hawkish attitude toward China.Blair Gable/ReutersWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Why Trump Allies Say Immigration Hurts American Workers

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    JD Vance and others on the “new right” say limiting immigration will raise wages and give jobs to sidelined Americans. Many studies suggest otherwise.As President-elect Donald J. Trump’s second administration takes shape, his plans for a signature campaign promise are becoming clear: mass deportations of undocumented immigrants, including new detention centers, workplace raids and possibly the mobilization of the military to aid in expulsions.Most economists are skeptical that this project will improve opportunities for working-class Americans. Mr. Trump and his allies don’t typically argue for purging undocumented immigrants on economic grounds; the case is more often about crimes committed by migrants, or simply a need to enforce the law.But there is an intellectual movement behind immigration restriction that seeks to reshape the relationship between employers and their sources of labor. According to this rising conservative faction, most closely identified with Vice President-elect JD Vance, cutting off the supply of vulnerable foreigners will force employers to seek out U.S.-born workers.“We cannot have an entire American business community that is giving up on American workers and then importing millions of illegal laborers,” Mr. Vance said in an interview with The New York Times in October, adding, “It’s one of the biggest reasons why we have millions of people who’ve dropped out of the labor force.”Mr. Vance is correct that the share of men in their prime working years who are in the labor force — that is, either working or looking for work — has declined in recent decades, sliding during recessions and never totally recovering. (Women in that age group, 25 to 54 years old, are working at the highest levels on record.)It seems like a simple equation: When fewer workers are available, employers have to try harder to compete for them. Certainly that dynamic played a role in the swift wage growth early in the pandemic, when people willing to do in-person jobs — waiters or nurses, for example — were in especially short supply.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Republicans and Democrats Highly Divided in Economic Outlook Under Trump

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    Consumer sentiment among Republicans has soared to its highest point since Donald J. Trump left the White House, while declining among Democrats.Donald J. Trump won last week’s election in part by promising to fix an economy many voters believed was broken.Republicans, at least, seem to believe him.Consumer sentiment among Republicans has soared nearly 30 percent in the week since Election Day, according to data from Morning Consult, an online survey firm. Republicans, according to the survey, now feel better about the economy than at any time since Mr. Trump lost his bid for re-election four years ago.Democrats, unsurprisingly, have had a very different reaction. Sentiment in that group has dropped 13 percent since Election Day, its lowest level since early 2023. For political independents, relatively little has changed in their attitudes toward the economy in recent days.

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    Consumer sentiment by party identification
    Note: Data shown as five-day moving average. Political independents not shown.Source: Morning ConsultBy The New York TimesThe big partisan shifts in Americans’ economic views are not a surprise. There have been similar swings after past presidential elections, although the trend has become more pronounced in recent decades. And voters have said for months that their economic expectations would depend partly on whether their preferred candidate won the White House.“Consumers have been telling us all year long their expectation for the economy is contingent on the outcome of the election,” said Joanne Hsu, director of the University of Michigan’s long-running survey of consumer sentiment. She expects to see large partisan swings in that survey as well, she said, when data from after the election becomes available this month.Measures of consumer sentiment have been depressed for much of President Biden’s time in office, though indicators such as the unemployment rate and wage growth have indicated a strong economy. In polls and interviews, Americans have cited inflation as one of the main sources of their dissatisfaction with Mr. Biden, even as inflation has cooled.Economic sentiment has begun to improve in recent months, however, perhaps suggesting that more Americans are starting to see improvements in inflation in their daily lives — albeit too late to help Democrats in this month’s elections.“Consumers probably are seeing and to some extent digesting some of the good economic news,” said Deni Koenhemsi, head of economic analysis for Morning Consult.Ms. Koenhemsi noted that consumers’ expectations had improved more rapidly than their assessment of the economy’s current state. That suggests that many are still struggling with high prices but becoming more optimistic about the months ahead.That gradual process isn’t surprising, said Neale Mahoney, a Stanford University economist who worked in Mr. Biden’s administration. In research published last year, Mr. Mahoney and a colleague found that it takes time for sentiment to adjust as inflation cools and people become used to the new, higher price of many goods and services.“Even if measured inflation has decreased, the way people experience inflation, they may still be acclimatizing to the price increases that were most acute in summer of 2022 into 2023,” Mr. Mahoney said.The election, he added, could accelerate that process, at least for Republicans, who might be more inclined to reset their expectations once their preferred candidate is in office. More

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    Working-Class Voters Are Pivotal. Both Candidates Are Vying for Their Support.

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    Kamala Harris’s plans offer a bigger boost for the working class, but Donald Trump seems to be convincing voters.Bernadette Daywalt had yet to decide whom to vote for in the presidential election. But the 69-year-old retiree said her decision would probably come down to economics.She and her 82-year-old sister have struggled to keep up with rising grocery prices over the past few years, and they now frequent a food pantry in the Philadelphia suburb where they live.“I think we’re headed downhill right now, with the cost of food, the cost of everything,” Ms. Daywalt said as she checked on her voter registration at an outreach van parked outside the Elmwood Park Zoo on a crisp October afternoon. She voted for Mr. Trump in 2016, and she felt better economically when he was president.Ms. Daywalt’s perceptions underscore a tough reality facing Democrats, who have been trying to recapture a working-class vote that has been slipping away from them.Many economists say Vice President Kamala Harris’s economic proposals would do more to help everyday Americans than the agenda put forward by former President Donald J. Trump. One model suggests that her package would boost post-tax income for the poorest Americans by 18 percent by 2026, much more than the 1.4 percent bump Mr. Trump’s ideas would offer.Income Effects of Trump vs. Harris Economic ProposalsAfter tax and transfers, estimates from the Penn Wharton Budget Model suggest that Kamala Harris’s proposals would boost low-income groups while costing rich ones.

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    Percent Change as of 2026
    Notes: Percent changes are from the baseline expectation for income in 2026. Baseline income is about $20,000 for the bottom quintile, $81,400 for the middle quintile and $327,000 for the group in the 90-95 percent range.Source: Penn Wharton Budget ModelBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More