The Return of the US Government’s Statutory Debt Ceiling
On March 15, 2017, the US government’s statutory debt ceiling for its total public debt outstanding will go back into effect at whatever level of accumulated national debt is on the books as of that date. CNBC has marked the date on their calendar.
After a 15-month hiatus, Congress is once again warming up for another round of self-inflicted budget “crises” that have become all but standard operating procedure when the Treasury needs to raise the limit of its borrowing authority.
That’s right: The debt ceiling is back.
The budgetary bottleneck arrives again next month, when the latest suspension of the limit expires on March 15. Back in October 2015, Congress decided to punt on the issue by suspending the debt ceiling—with a hard end date.
While the official date is now less than two weeks away, the US Treasury Department has been actively working to keep the nation’s total public debt outstanding from rising any faster than possible since late November 2016. Their efforts so far have been successful in holding the national debt lower than it might otherwise have grown, which if not for their intervention, would have been surpassed $20 trillion back in mid-December 2016.
What the US Congress will most likely do, sometime during the next month, is to act to increase the national debt to accommodate the spending already planned to occur through the rest of the government’s 2017 fiscal year, which ends on September 30, 2017.
But there is an interesting dynamic developing in the US Congress where a number of budget-conscious representatives may look to use the debt ceiling to rein in some of the Trump administration’s more ambitious spending plans. Politico‘s Rachel Bade and Josh Dawsey report:
GOP lawmakers are fretting that Trump’s spending requests, due out in a month or so, will blow a gaping hole in the federal budget—ballooning the debt and undermining the party’s doctrine of fiscal discipline.
Trump has signaled he’s serious about a $1 trillion infrastructure plan, as he promised on the campaign trail. He also wants Republicans to approve extra spending this spring to build a wall along the US southern border and beef up the military—the combined price tag of which could reach $50 billion, insiders say. And that’s to say nothing of tax cuts, which the president’s team has suggested need not necessarily be paid for….
“I don’t think you can do infrastructure, raise defense spending, do a tax cut, keep Medicare, Medicaid and Social Security just as they are, and balance the budget. It’s just not possible,” said Rep. Tom Cole (R-Okla.), a senior member of the House Budget Committee. “Sooner or later, they’re going to come to grips with it because the numbers force you to.”
Indeed they will, but that hasn’t stopped any previous presidential administration from running up the national debt from the time it took office until it left. At last, not since Andrew Jackson fully paid off the US national debt in 1835. – Craig Eyermann
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