Debt ceiling deadline likely in early March, CBO warns
The Treasury Department is likely to exhaust its so-called "extraordinary measures" and run out of cash in the first half of March if Congress doesn't raise the debt ceiling before then, the nonpartisan Congressional Budget Office (CBO) warned Wednesday.
CBO warned in its report that if that occurs, "the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both."
The budget scorekeeper had previously estimated that the deadline would be in late March or early April, but it moved up the deadline as a result of the tax law the president signed into law in December. The new tax law means lower taxes for most taxpayers, and that means lower revenues coming into the government. As a result, CBO now estimates that beginning in February, "withheld amounts of individual income taxes will be roughly $10 billion to $15 billion per month less than anticipated before the new law was enacted."
Also, the federal government ran a $23 billion deficit in December, and, CBO says, it usually runs a deficit in the second quarter of the fiscal year.
The debt ceiling suspension that Congress raised last fall expired in early December and the Treasury Department has since been relying on extraordinary measures.
This adds even more pressure on lawmakers who are struggling to negotiate legislation that would overhaul the nation's immigration system, a budget deal to lift spending ceilings on the military and nondefense domestic programs and an omnibus spending package for the rest of the fiscal year.
Congress must pass another spending bill by next Thursday or the government will shut down again. It shut down for three days last month after Democrats blocked a short-term spending bill because their demands to protect people who came to the U.S. illegally as children were not met.
