Federal Debt and the Statutory Limit

Abstract

The debt limitcommonly called the debt ceilingis the maximum amount of debt that the Department of the Treasury can issue to the public or to other federalagencies. The amount is set by law and has been increased over the years to finance the governments operations. The limit was suspended on September 8, 2017. On December 8, 2017, that suspension expired, and the Secretary of the Treasury announced a debt issuance suspension period during which existing statutes allow the Treasury to take extraordinary measures to borrow additional funds without breaching the debt ceiling. The Congressional Budget Office projects that if the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted and the Treasury will most likely run out of cash in the first half of March 2018. If that occurred, the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both. (The timing and size of revenue collections and of outlays over the next few weeks could differ noticeably from CBOs projections, however, so the extraordinary measures could be exhausted and the Treasury could run out of cash either earlier or later than CBO projects.) CBO previously projected that the extraordinary measures would be exhausted and the Treasury would run out of cash sometime in late March or early April 2018.1 After incorporating the anticipated effects of recent tax legislation and actual spending and revenue amounts in December into its calculations, CBO now projects the range of possible dates as falling earlier in March. Because the tax legislation reduced individual income taxes for most taxpayers, the Internal Revenue Service released new income tax withholding tables for employers to use beginning no later than the middle of February 2018.

Open PDF

Document Details

Document Type
Technical Report
Publication Date
Jan 01, 2018
Accession Number
AD1057377

Entities

People

  • Meredith Decker

Organizations

  • Congressional Budget Office

Tags

Communities of Interest

  • Biomedical

DTIC Thesaurus Topics

  • Accountability
  • Active Duty
  • Business Administration
  • Congress
  • Finance
  • Governments
  • Humanitarian Assistance
  • Investments
  • Law
  • Local Governments
  • Medicare
  • Payment
  • Postal Service
  • Security
  • Social Security

Fields of Study

  • Business

Readers

  • Economics
  • Government Contracting/Procurement.
  • Public Financial Management and Budgeting