Federal government to exhaust debt limit this fall

The federal government will run out of borrowing space and bump up against its debt limit some time this fall, the Congressional Budget Office said in a new report Tuesday, starting the clock on what’s likely to be a tough fight for Republicans to raise the cap.

Congress two years ago suspended the debt limit through March 15, allowing the government to borrow whatever it needed over the last 17 months. But the limit will be re-imposed as of March 16.

At that point Congress will either need to raise it or suspend it again. Without that, the Treasury Department will have to use “extraordinary measures” such as borrowing from federal employees’ retirement funds to keep the government afloat. That would give the government between $350 billion and $400 billion of wiggle room — enough to last into the fall.

“By CBO’s estimate, the Treasury would most likely be able to continue borrowing and have sufficient cash to make its usual payments until sometime in the fall of this year without an increase in the debt limit, though an earlier or later date is possible,” CBO analysts said in their new report.

The Bipartisan Policy Center has calculated a more specific date, saying the Treasury Department will run out of space in October or November.

The total federal debt stood at $19.878 trillion as of Friday. That’s actually down $69 billion from where it was when Mr. Trump took office.

The president last month demanded credit for the drop, saying that by comparison the debt spiked during President Obama’s first weeks in office.

Budget analysts said that while the numbers were accurate, the fluctuations under Mr. Trump were usual ups and downs, not related to policies he’d implemented.