The Fiscal Times
Jan. 8, 2013
With relatively little time left before it begins to run out of borrowing authority, the Treasury could soon be forced to pick and choose between paying interest on the national debt and mailing Social Security checks to retirees and paying defense contractors and keeping the federal government fully operating.
A year and a half after weathering the last debt ceiling crisis, Treasury officials are bracing for another bruising battle between the Obama Administration and congressional Republicans over terms for extending the government’s borrowing authority beyond the current $16.4 trillion limit. Technically, the Treasury bumped into that limit on Jan. 1, but has begun employing a series of budget gimmicks at its disposal to buy some extra time.
Yet the government will be unable to pay all of its bills as early as Feb. 15, or the “X Date,” according to Steve Bell, a senior official at the Bipartisan Policy Center. “Our numbers show that we have less time to solve this problem than many realize,” Bell told reporters at a briefing on Monday. “It will be difficult for Treasury to get beyond the March 1 date in our judgment.”
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Economic Policy Project