Treasury Secretary Jack Lew has estimated that extraordinary measures will be exhausted on or about November 3, 2015. At that point, he projects that the federal government will have less than $30 billion of cash on hand to make required payments.
This cash estimate is roughly consistent with BPC’s latest projection, which is that if policymakers do not act on the debt limit, Treasury will deplete its reserves and have insufficient cash to meet all financial obligations sometime between November 10 and November 16.
Due to the unpredictability of cash flows—and thus, all of these projections—policymakers would need to act well in advance of November 10 if they intend to ensure that all obligations of the U.S. government are able to be met in full and on time.
In the period after running out of cash, Treasury would be unable to meet roughly 37 percent of all obligations due. How Treasury would operate in such an environment is unclear. Prioritization and delayed payments are two possibilities, but there is substantial uncertainty about operationalizing them.
October 27, 2015: Debt Limit “X-date” Range Updated to Nov. 10-16
October 26, 2015: Moody’s Debt Default Statement Doesn’t Adequately Address Risks
October 22, 2015: Treasury’s Auction Postponement: “Canary in the Coal Mine”
October 15, 2015: Recent History of the Debt Limit
October 7, 2015: Treasury Will Hit “X-date” for Paying Debt Nov. 10-19
October 2, 2015: Treasury Could Run Out of Cash Mid- To Late-November
September 11, 2015: Lew Letter on Debt Limit in Line with CBO, BPC Projections
September 2, 2015: Latest Monthly Treasury Data Doesn’t Change BPC Debt Limit Projection
August 25, 2015: CBO Debt Limit Projection Consistent with BPC’s Analysis
July 10, 2015: Debt Limit Brinkmanship Threatens Markets
U.S. Government Accountability Office: Market Response to Recent Impasses Underscores Need to Consider Alternative Approaches
Fiscal Outlook: Understanding The Federal Debt
U.S. Government Accountability Office
Extraordinary Measures 101
Updated March 13, 2015: Extraordinary Measures, Simplified
January 9: Extraordinary Measures, Simplified
December 19: Late Start to Tax Filing Season Affects X Date
November 21: Thoughts on CBO’s New Debt Limit Report
November 21: Debt Limit Suspension: Frequently Asked Questions
September 25: Debt Limit Update: No Change to BPC X Date Projection
September 10: BPC’s Debt Limit Projection: Key Takeaways
January 30: When Will the Next Debt Limit X Date Be?
- What Is a Government Default on its Debt?
- Platinum Coins and IOUs: Missing the Point
- Debt Limit Analysis Update
- BPC’s Debt Limit Projection: Key Takeaways
- Will the Delay in the Tax Filing Season Affect the X Date?