New debt limit deadline: Nov. 19?

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Congress may have a few more weeks to hammer out a debt limit agreement than once thought, according to new outside analysis.

The Bipartisan Policy Center (BPC) announced Wednesday it has determined that the government will likely be unable to pay all its bills without a borrowing boost sometime between Nov. 10 and Nov. 19, up to two weeks later than the deadline laid out by the Treasury Department.

{mosads}On Friday, Treasury Secretary Jack Lew told lawmakers that he believed the government would exhaust its “extraordinary measures” — maneuvers that help the government free up cash beneath the debt limit — on Nov. 5. At that point, the government would be left to pay its bill with whatever cash is left on hand, which Lew warned would be exhausted quickly.

The Nov. 5 deadline set by Lew simply determined when the Treasury would no longer have any additional steps to take to free up funds, and would have to pay bills with whatever cash was available. What the BPC is attempting to do is nail down the date that the government would have insufficient funds to pay a bill, leading to a potentially catastrophic default.

By looking at the schedule of upcoming government payments, BPC’s best guess places the absolute deadline for an increase to the $18.1 trillion debt limit as sometime between Nov. 10 and Nov. 19, but the group urged Congress to act well in advance of that timeline because the matter is so uncertain.

“Congress will need to act well before the projected X-date in order to avoid an inadvertent default because of the uncertainties in all estimates,” said Steve Bell, BPC’s senior director of economic policy.

According to BPC, the government has several hefty checks to cut in November, when the Treasury will have no additional room to borrow. The government must make a $14 billion Social Security payment on Nov. 10, a $30.4 billion interest payment on Nov. 16, and then another $13.8 billion Social Security payment on Nov. 18.

In his letter to Congress, Lew warned that the government would be left with less than $30 billion on hand around Nov. 5.

The government reached its borrowing cap in March; since then, the Treasury has relied on its extraordinary measures to create room below that limit to pay essential bills.

On Wednesday, Speaker John Boehner (R-Ohio) said there was not yet an agreement on how to deal with the debt limit.

Tags Boehner Jack Lew John Boehner

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