Revenue shortfall adds debt limit pressure

Federal government revenues fell short of expectations for the second month in a row, bringing closer the day that the Treasury Department will hit its debt limit.

According to the Congressional Budget Office (CBO), government receipts from the beginning of the fiscal year in October through May fell between $60 billion to $70 billion short of projections, a shortfall of around 3 percent.

“The bulk of that shortfall reflects smaller-than-anticipated payments of individual and, to a lesser extent, corporate income taxes, mostly for economic activity in 2016,” the CBO said in a Wednesday report.

{mosads}White House budget chief Mick Mulvaney said in recent testimony to Congress that the unexpected revenue shortfall was accelerating the path toward hitting the debt ceiling, at which point the Treasury Department runs out of legal authority to borrow in order to make payments.

Treasury Secretary Steven Mnuchin has asked Congress to address the debt ceiling before the August recess to reassure markets that the United States will not default on its debt, an event that would have worldwide economic consequences. But raising the debt ceiling is a politically difficult vote for many Republicans.