Washington, D.C. – An analysis released today by the Bipartisan Policy Center (BPC) finds that the federal government will be unable to meet all of its spending obligations as early as mid-October, unless the debt ceiling is raised. BPC estimates that the federal government will exhaust its borrowing authority and no longer have sufficient funds to pay all of its bills in full and on time at some point between October 18 and November 5, 2013.
If the X Date occurs on October 18, at the beginning of BPC’s projected window, the Department of Treasury would be about $106 billion short of paying all bills owed between October 18 and November 15. Approximately 32% of the bills owed during that period would go unpaid.
BPC estimates that, as of August 31, the federal government has $108 billion in extraordinary measures available for use. After the federal government has utilized all of the extraordinary measures, only two sources will remain to continue funding government operations: remaining cash on hand and federal revenues received each day.
BPC identified several key events or large payments in September and October that affected its X date range, including several interest payments on the debt and approximately $100 billion in quarterly income tax payments due in mid-September. At the end of September, $15 billion in dividends are due to the U.S. Treasury from Fannie Mae and Freddie Mac. Also, on the first day of the new fiscal year – October 1 – the value of military retirement benefits, including pensions and health care, earned during the year by currently serving members of the military must be accrued. This will result in an approximately $75 billion increase in intragovernmental debt, which counts toward the debt limit.