Posted January 30, 2013
The next X Date would most likely fall in August, but with a realistic chance of coming even later
By Steve Bell, Loren Adler, Shai Akabas and Brian Collins
UPDATE: Obama signs debt-ceiling bill
UPDATE: H.R. 325, The Debt Limit, and Extraordinary Measures: A Technical Note
UPDATE: Senate votes to temporarily suspend federal debt limit
Sometime this week or next, the Senate is expected to vote on H.R. 325, a bill that recently passed the House and includes provisions to temporarily suspend the debt limit and delay compensation for members of Congress until a budget is passed out of their respective chambers.
BPC published an analysis of that legislation last week. Assuming that the bill is enacted in short order, Treasury would have Extraordinary Measures at its disposal to postpone the next X Date – the first day that the federal government is unable to meet all of its obligations in full and on time – for some time beyond May 19. Furthermore, BPC estimated that the amount of the debt limit increase would be approximately $450 billion.
With additional time to refine its forecast, BPC is now prepared to project that the next X Date would most likely fall in August, but with a realistic chance of coming even later. Part of the reason that Extraordinary Measures will last longer this time around is that significant additional Extraordinary Measures become available on June 30 that will allow Treasury to raise additional cash to meet its obligations.
Given that BPC’s projection is over half a year from now, there is substantial uncertainty over economic and cash flow fluctuations during the intervening months. Thus, while narrowing the X Date projection window any further at the current time is not possible, BPC will do so over the coming months as additional data becomes available.
Economic Policy Project