Politics

Expiration of Debt Limit Suspension Nears in Mid-March

Lawmakers are only beginning to focus on raising the borrowing ceiling

House Democratic Whip Steny H. Hoyer says Democrats are “inclined” to vote for a debt limit increase as long as the bill does so without any conditions. (Al Drago/CQ Roll Call file photo)

The latest estimates of the drop-dead date for raising the debt limit run from late August all the way into November.

The current debt limit suspension will expire and reset to about $20 trillion on March 16. That’s the same day President Donald Trump is expected to submit the outline of his first budget to Congress.

Congress could put off raising the borrowing ceiling until late summer or fall and still avoid a government default if, as expected, the Treasury Department employs so-called extraordinary measures. The measures are accounting maneuvers that allow the federal government to continue to borrow and fund government operations temporarily.

Once they are exhausted, the Treasury is left with cash on hand and incoming tax receipts, which would be insufficient to pay all bills on time.

The Bipartisan Policy Center on Thursday estimated the Treasury will run out of enough money to pay all its bills in October or November.

Lou Crandall, chief economist for Wrightson ICAP, told CQ Roll Call his preliminary numbers suggest late August or early September is the more likely range.

Crandall said that “one good or bad day in the April tax processing season could change that,” referring to the amount of taxes collected. He added that the “confidence interval around any point estimate of the drop-dead date is very wide at this early stage.”

Lawmakers are only beginning to focus on the debt limit.

In a meeting with reporters Thursday, House Democratic Whip Steny H. Hoyer said Democrats would be “inclined” to vote for a debt limit increase as long as the bill is clean, meaning it would raise the debt limit without any conditions. But the Maryland lawmaker added that if conservatives insist on a trade-off for raising the borrowing ceiling, “that’s a different question.”

In a release, Shai Akabas, fiscal policy director at the Bipartisan Policy Center, said the “possibility of major fiscal policy changes this year and heightened volatility around tax revenues mean that any projections have a higher level of uncertainty this time around.”

Akabas urged lawmakers to “address the debt limit well in advance of the ‘X-date’ range if they want to guarantee that the Treasury can continue to pay all of its bills in full and on time.”

Congress last suspended the debt limit in late 2015 as part of a two-year budget deal that raised the discretionary spending caps for fiscal 2016 and 2017.

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