Washington, D.C.– The Treasury Department’s latest statement on the debt limit is in line with the Bipartisan Policy Center’s analysis. The following is a statement by Shai Akabas, BPC director of economic policy:
“Treasury confirmed today that so-called extraordinary measures will provide borrowing authority to avoid federal default through at least January 2018. This is consistent with BPC’s latest statement that March is a reasonable preliminary estimate for when the debt limit ‘X Date’ – when the government can no longer pay all of its bills in full and on time – could arrive. We emphasize that timing could fluctuate substantially depending on factors such as disaster spending and tax reform.
“On December 8, the debt limit suspension authorized in the September budget deal will expire, and the debt limit will be reinstated at over $20 trillion. Absent action on the debt limit before that date, Treasury would then deploy so-called extraordinary measures to operate the federal government for some additional period of time. As detailed during prior debt limit impasses, taxpayers would likely once again incur substantial costs from reaching the debt limit that could otherwise be avoided.
“It is still too early to make a formal ‘X Date’ projection. The uncertainty on the timing remains significant given that more emergency spending is likely for this year’s hurricanes and wildfires and retroactive tax reform is a possibility. We will continue to monitor cash flows and provide a formal projection when the data are sufficient to do so.”
Shai Akabas is available for comment.