The extraordinary measures being used to fund U.S. federal government debt will be exhausted in the first half of March, the Congressional Budget Office (CBO) reported Jan. 31. CBO moved up the date it predicts the Treasury will run out of cash from late March to early April after passage of the recent tax bill.
“CBO now estimates that, starting 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,” according to CBO.
Failure by Congress to raise the debt limit before current measures run out will “ultimately lead to delays of payments for government activities, a default on the government’s debt obligations, or both,” according to CBO. Congress faces a Feb. 8 deadline to authorize fiscal 2018 government spending before the current continuing resolution funding agencies at fiscal 2017 levels expires.
Many Republicans in Congress have opposed debt ceiling increases and the funding vote already is subject to sharp disagreements over immigration and other matters. The need to raise the debt ceiling adds increased pressure to the budget negotiations.
