Report: Spending Must Drop By 44 Percent in Default

The Hill reports:

New analysis by the Bipartisan Policy Center (BPC) which has been shared extensively with members of Congress estimates that the Treasury Department would not be able to pay all its bills and would need to implement an immediate 44 percent cut in federal spending in the event of a default.

On an annualized basis, the cut in spending alone is a 10 percent cut in GDP, BPC scholar Jay Powell told reporters.

The report released Tuesday concludes that Treasury would not be able to pay all its bills between Aug. 2 and “probably” not later than Aug. 9 if the debt ceiling is not increased.