Treasury: Extraordinary measures push debt limit to January

Congress will need to take action to raise the debt limit by sometime in January 2018, according to an estimate from the U.S. Treasury released Wednesday.

“If Congress fails to increase or further suspend the debt limit by December 8, Treasury, as it has in the past, can take certain extraordinary measures to continue to finance the government on a temporary basis,” said a report from Monique Rollins, acting assistant secretary for financial markets.

“Extraordinary measures will allow the government to continue to meet its obligations through January 2018. It is currently too early to provide a more precise forecast as to how long the extraordinary measures will last,” it continued. 

{mosads}In September, Congress suspended the debt ceiling for three months to give itself more breathing room to resolve the issue.

The debt ceiling, or limit, specifies the maximum amount of money the U.S. can borrow. Because the U.S. spends more than it takes in, an inability to borrow would lead to a debt default, jolting financial markets worldwide.

Last year, during a similar period, the Treasury resorted to “extraordinary measures,” loopholes for off-book borrowing that postponed the borrowing deadline. Wednesday’s note indicates that such measures would be able to carry the Treasury from the Dec. 8 deadline into January without a debt deal. 

Conservative Republicans are loath to raise the debt without spending cuts, and Democrats in the minority see the issue as a point of leverage for must-pass legislation that requires their votes. 

The Dec. 8 deadline coincides with the end of a stopgap spending measure that has kept the government running at 2017 spending levels into the 2018 fiscal year, which began in October. Without an agreement on another stopgap or new funding for the government, the government will shut down after that date.

The issue of approving spending for the government is separate from the debt ceiling, which addresses how the government pays for already-approved spending.