Washington, D.C. – On March 16, 2017, the federal debt limit will come back into effect at about $20.1 trillion, according to new projections from the Bipartisan Policy Center’s Economic Policy Project.
“Just two months after the next president and Congress are sworn in, they will be running a government that is up against its legal borrowing limit,” said Shai Akabas, director of fiscal policy for BPC.
Later next year, the federal government will be unable to meet all of its financial obligations in full and on time if policymakers fail to take action.
The federal debt limit, which was suspended by Congress and the president in November 2015, is set to be reinstated on March 16, 2017. At that point, the government’s outstanding debt would immediately bump up against the new debt limit of about $20.1 trillion, and the Treasury Department would be forced to take “extraordinary measures” to ensure the smooth functioning of the federal government’s finances.
BPC projects that extraordinary measures would allow Treasury to continue meeting its financial obligations for a limited amount of time, at least until mid-summer of 2017.
“It is imperative that policymakers give this issue their immediate attention and consider the risks associated with delaying action,” Akabas cautioned.
BPC will continue to provide updated projections as appropriate.
Shai Akabas is available for comment.