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The U.S. government will likely likely run out of cash sometime in October or November if action isn't taken to raise the debt limit, the nonpartisan Congressional Budget Office said in the latest estimates released Wednesday, noting it could not rule out the possibility that the so-called X Date could come earlier than October.

CBO estimates that unless the debt limit is increased, the Treasury, after using all available extraordinary measures, will probably be unable to make its usual payments starting sometime in the first quarter of the new fiscal year, most likely in October or November, although an earlier or later date is possible, the report said. One ex-New York Fed official told MNI the timing could be further complicated as the Treasury may not draw down its cash balance as far as previously suggested to USD450 billion by the end of July.

Democrats have been eyeing several possibilities for heading off debt payment problems, such as attaching a debt-ceiling increase to a bipartisan infrastructure bill being negotiated in the Senate or as part of a stop gap funding bill in September to avoid government shutdowns on Oct. 1 with the start of the new fiscal year.