Think Tank Predicts Debt Limit Will Be Reached by October at the Earliest
The limit refers to the maximum amount that the U.S. government can borrow to settle its obligations.
The debt ceiling is projected to be reached between mid-July and early October, according to an estimate from the Bipartisan Policy Center on March 24.
The limit refers to the maximum amount that the U.S. government can borrow to settle its obligations.
The think tank utilized data provided by the Treasury Department and the Congressional Budget Office.
“This year offers various opportunities to start organizing our fiscal responsibilities without jeopardizing the full faith and credit of the United States.”
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“Policymakers must prioritize responsible budgeting, which begins with steering clear of debt limit brinkmanship and its effects on our economy.”
In 2023, the debt ceiling was suspended until January 2, 2025, as part of an agreement between then-President Joe Biden and then-House Speaker Kevin McCarthy (R-Calif.), which included cuts to COVID-19 relief funds and enhanced work requirements for recipients of the Department of Agriculture’s Supplemental Nutrition Assistance Program.
Currently, there is a standoff between the House and the Senate regarding the increase of the debt ceiling through reconciliation. This process allows bills related to the national debt, taxation, and spending to bypass the filibuster in the Senate, where 60 votes are typically required to advance most legislation.
Both chambers of Congress need to approve a unified budget resolution to move forward with a reconciliation bill.
The House budget proposal suggests increasing the debt ceiling by $4 trillion over two years, while the Senate does not include such a provision.
There has been ongoing debate about whether to incorporate a debt limit increase into a bill for disaster relief funds.
“Lawmakers cannot afford to postpone action on the debt limit,” Shai Akabas, vice president of economic policy at the Bipartisan Policy Center, stated.
“While Congress has a full agenda in 2025, tackling the debt limit well before reaching the X Date should be a top priority right now.
“History has demonstrated that even coming close to the X Date can trigger market instability, increased borrowing costs, and diminished confidence in U.S. fiscal stability.”
If the debt ceiling is not raised, it could result in the United States defaulting on its financial commitments.
