Washington, D.C. — The Bipartisan Policy Center projects the debt limit “X Date” will arrive sometime in October or early November 2019, after updating its modeling with the latest data from tax season. This forecast narrows BPC’s earlier projection range of fall 2019.
“Tax season didn’t bring any major surprises, so we now have a better sense of when the Treasury will run out of borrowing room,” said Shai Akabas, BPC’s director of economic policy. “To be perfectly clear: our new projection is anything but an excuse for policymakers to delay action on the debt limit. The risks to taxpayers, the U.S. economy, and global markets are growing by the day.”
“Rather than putting the economy at risk and wasting taxpayer money through higher interest payments, Congress should act now to extend the debt limit,” Akabas said.
The debt limit was reinstated from its latest suspension on March 2, 2019. Since then, the Treasury Department has been deploying so-called “extraordinary measures,” or accounting maneuvers that buy limited additional time, to delay what BPC calls the “X Date,” the day on which the federal government can no longer meet all its obligations in full and on time.
Treasury has approximately $600 billion worth of cash on hand and extraordinary measures remaining, which will enable the government to continue full operations for several additional months. But at some point in October or early November, absent action by Congress to extend the debt limit, those resources would be exhausted and Treasury would default on some of its obligations. A large payment due to the Military Retirement Trust Fund at the beginning of October could play a prominent role in the timing of the “X Date.”
As always, BPC’s forecast carries uncertainty. Changes in economic conditions or fiscal policy could affect the “X Date” range.
Shai Akabas is available for comment. BPC will hold a media conference call at 3 p.m. ET today to give additional detail on our projection. To RSVP for that call, please email BPC Press Secretary Jordan LaPier at [email protected].
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