The US debt crisis is expected to result in a high-stakes confrontation on Capitol Hill.

A new calculation predicts that a potential showdown over the U.S. debt limit will occur on Capitol Hill by mid-June.

The EPIC released a new model on Monday stating that there is a "possibility" that the U.S. government will run out of funds to pay its debts by June 16, 2025.

"The government is projected to have a $2 trillion deficit next year, meaning that the spending obligations incurred by Congress and the government exceed the expected tax revenues. According to Matthew Dickerson, director of Budget Policy at EPIC, to meet these obligations on time, the debt limit must be increased."

Last year, President Biden and former House Speaker Kevin McCarthy, R-Calif., reached an agreement that temporarily suspended the debt limit until January 2025. However, during this period, the national debt exceeded $36 trillion.

The Treasury Department can stave off a national default for approximately six more months by implementing "extraordinary measures," according to EPIC's analysis, until the "X-date."

If the debt limit is not increased, it could result in significant economic downturns in both the U.S. and worldwide.

In May 2021, Biden and McCarthy reached a deal to avoid a federal default on June 5. However, Fitch had already downgraded the U.S.'s AAA credit rating to AA+, causing turmoil in domestic financial markets.

Dickerson stated that Congress has numerous pressing legislative priorities to address before engaging in debt limit discussions, and thus, he was not bracing for another 11th-hour agreement.

He stated that it would be challenging for Congress to handle this.

The negotiations can also serve as a chance for Republicans to propose significant deficit reduction plans, EPIC's paper suggested.

Dickerson stated that reaching the debt limit should serve as a warning and prompt action, sounding the alarm.

The report stated that historically, debt limit discussions have facilitated the political environment required for deficit reduction agreements, providing an opportunity in 2025 to combine necessary debt limit increases with measures to control spending and stimulate economic growth.

The national debt was attributed to "excessive spending."

"The debt limit has been modified four times since August 2019, with two suspensions and two dollar-specific debt limit increases. As a result, the debt has grown by approximately $13.9 trillion over the past five years. However, the current fiscal trajectory, which involves government spending exceeding historical norms and growing at a faster rate than the economy, is unsustainable and harmful to American families."

The federal government's borrowing limit is the total amount it can borrow to fulfill its obligations, which include Social Security, Medicaid, Medicare, and veterans' payments, among many others.

The protracted battle over government spending that fueled chaos in the 118th Congress resulted in the talks that led to suspending the debt limit last year.

McCarthy faced opposition from both Democrats and GOP hardliners on how to handle the debt limit and fiscal cliff.

Despite the changes in leadership and the balance of power in Congress, Dickerson emphasized that Democrats will still have a role in negotiations due to the GOP's narrow margins.

"To achieve a bipartisan agreement, you must have something that appeals to everyone, as President Trump will not sign anything that significantly increases spending and is deemed irresponsible with debt."