Washington, DC – The Bipartisan Policy Center now projects that the debt limit “X Date” will most likely arrive between October 15 and November 4, 2021. This forecast refines BPC’s prior projection range of mid-October to mid-November.
“No one can be certain of the X Date, but we know it’s coming within a matter of weeks,” said Shai Akabas, BPC director of economic policy. “The U.S. government risks missing or delaying critical bills that will come due in mid- and late-October that millions of Americans rely on, from military paychecks and retirement benefits to advanced child tax credit payments.”
BPC has also prepared an analysis of daily cash flows and how the Treasury Department may be forced to prioritize or delay payments should Congress not raise or suspend the debt limit before the X Date.
“Crossing the X Date would be unprecedented. At that point, Treasury would be left with an array of highly unattractive and risk-filled options,” said Akabas.
As is the case with today’s update, BPC typically narrows its X Date projection as additional data on federal cash flows become available. The COVID-19 pandemic and economic recovery have added additional uncertainty to this year’s estimate, contributing to the wider-than-normal range at this stage in the projection process.
BPC has separately estimated that if the debt limit is suspended for 15 months and reinstated on December 17, 2022—the date proposed in the continuing resolution recently passed by the House—the new debt limit would be $30.8 trillion, approximately $2.4 trillion greater than its current level (not accounting for any future policy changes in spending or revenues).
Failing to raise or suspend the debt limit in a timely manner would be a voluntary decision by lawmakers to stop paying some of the nation’s bills, carrying with it grave risks and real costs to American taxpayers and the global economy alike.
BPC continues to closely monitor daily federal cash flows and will update its projection as warranted.
Shai Akabas is available for comment.
Explainer: Debt Limit Analysis