The nonpartisan Congressional Budget Office (CBO) said Tuesday that the federal government's borrowing authority would likely run out this fall if the debt ceiling isn't raised.
The United States is expected to hit the legal limit on how much debt it can hold, or the “debt ceiling,” by March 16. The Treasury would then be forced to take “extraordinary measures” to fund essential payments without adding to the debt.
Those steps, such as halting payments to government investment funds and redeeming government-held securities, could last until this fall, the CBO said in a report released Tuesday.
“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,” the CBO said in the report.
Failing to raise the debt ceiling after those measures run out would risk the United States defaulting on its debt.
Treasury Secretary Steven Mnuchin said during his confirmation hearing that he supports increasing the debt limit, and Office of Management and Budget Director Mick Mulvaney said last month that the administration plans to use extraordinary measures as long as possible.
"But we will deal with it," he said, and "certainly" before Congress recesses in August.