OREANDA-NEWS. According to the forecasts of the by experts of the non-commercial Bipartisan Policy Center (BPC) the default in the USA may occur in the beginning of September. Earlier the BPC predicted that the default would come between October and November.

Shai Akabas, the director of economic policy of the BPC, said that the risk of default may increase if federal tax revenues fall. The growth of federal revenues of the USA in 2019 is less than 3 % (it was assumed that it would be about 6 %). Lower income tax collections are apparently related to tax cuts in 2017.

Akabas noted that participants in budget negotiations should remember about lack of time. The only way to eliminate the possibility of a default this year is to extend the maturity of public debt in the coming weeks. So, it is recommended to the authorities to activate negotiations on this matter with the US Congress.

In February 2019, the US national debt reached a record high of 22.01 trillion dollars. The year before, in April 2018, experts in Congress predicted public debt growth to 96 % of GDP by 2028. They linked this effect with tax changes due to the passing of the Tax Cuts and Jobs Act in 2017. This law provides a reduction in the corporate tax rate to 20 %. Kevin Hassett, the Chairman of the Council of Economic Advisers of the White House demanded that the President of the United States, Donald Trump, reduce the budget of each federal agency by 5 % to stop the growth of public debt.