Washington, D.C.– The latest Congressional Budget Office projection that the Treasury Department will run short of extraordinary measures in late March or early April without an extension of the debt limit is largely in line with the Bipartisan Policy Center’s preliminary estimate from earlier this fall.
Absent action by Congress to extend the debt limit, BPC previously estimated that the “X Date” – when Treasury would run short of cash to pay all its bills – could arrive sometime in March. BPC plans to issue its next formal debt limit projection on Monday.
On December 8, the current suspension of the debt limit will expire, after which the limit will be reinstated. At that time, the Treasury secretary would be forced to implement so-called “extraordinary measures” – accounting maneuvers that provide Treasury with cash to pay the government’s bills – to avoid a default on federal obligations.
“According to CBO, the federal government will again be at risk of defaulting on its obligations in the spring,” Shai Akabas, director of economic policy at BPC, said.
“These debt limit projections are being conducted in a period of significant policy uncertainty. Policymakers’ long to-do list includes tax reform, funding the government for the current fiscal year, and disaster spending – each of those could affect the timing of the ‘X Date’,” he said.
Shai Akabas is available for comment.