The Treasury Department will run out of room under the debt ceiling and risk defaulting on U.S. government obligations between. Oct. 18 and Nov. 5, according to new projections from the Bipartisan Policy Committee.
The estimates are the latest and most detailed projections of how long the Treasury has before it risks defaulting on U.S. sovereign debt or other government obligations and endangering the world-wide financial system. Treasury Secretary Jacob Lew told Congress in June that he expected to run out of room under the statutory debt limit in mid-October.
The analysis released by the Bipartisan Policy Committee Tuesday afternoon was directed by Steve Bell, a former staffer for Republican senator Pete Domenici of New Mexico. Bell and other committee staffers used government projections of daily Treasury revenues and outflows, as well as measures available to the secretary to free up funds, to estimate the date at which the Treasury no longer has sufficient funds to pay all its obligations on time. The committee calls this date the "X-Date."
Estimates of the exact X-Date differ. Analysts at Credit Suisse pegged the date as sometime as late as mid-November. But the Bipartisan Policy Committee's projections are the most comprehensive available to Congress and the public.
If Congress does not raise the debt limit before the X-Date, it risks panic in financial markets and the possibility of an economic slowdown or worse.