The federal government once again faces a new debt limit that it cannot exceed, after an 18-month stretch in which it was free to borrow as much money as it wanted.
The new debt ceiling is $19.846 trillion, which was the total amount of national debt accrued through Wednesday. The exact amount was $19,845,811,298,014.03.
Congress passed legislation in late 2015 that suspended the debt ceiling through Wednesday, at which point the total national debt would become the new ceiling.
That means the government is already at its borrowing limit. To stay there, the Treasury Department has already started implementing “extraordinary measures” to limit borrowing.
The new debt ceiling is notable in that it approached but never exceeded $20 trillion. The Trump administration managed to keep total national debt under that mark over the last several weeks, in part by spending hundreds of billions of dollars in cash.
The next step for the Trump administration and congressional Republicans is figuring out a way to allow more borrowing. The government is expected to be able to continue funding operations through the summer or early fall.
But beyond that, an increase in the ceiling will likely be needed. Treasury Secretary Steve Mnuchin has already asked Congress to extend it, but Republicans in Congress are likely to bargain for measures to reduce spending as part of the deal.
Trump on Thursday released a budget that would cut $54 billion from domestic programs in order to boost defense, but even those cuts are likely to be too big for Congress to swallow.
It’s unclear what conditions the Trump administration might want as part of a deal to raise the debt ceiling. But Trump’s budget chief, Mick Mulvaney, pushed hard not to extend the debt ceiling at all while he was in the House, a sign the administration could try to aggressively look for ways to keep borrowing down.
One question facing Republicans is whether to increase the debt ceiling to a specific new level that cannot be exceeded, or to suspend it again, which has been done the last few times the ceiling has been reached.
While Mnuchin indicated that Treasury prefers an increase to a specific level, but congressional aides told the Washington Examiner that no decisions have been made.
Because Congress has several months to figure out the problem, some think it may not be resolved at all until the end of the current fiscal year. Romina Boccia, the Grover M. Hermann Research Fellow at Heritage Foundation, told the Washington Examiner that the GOP could decide to push through some kind of debt ceiling increase then, at a time when the operation of the federal government is at stake.
“I don’t think we’ll hear much about the debt ceiling until then,” Boccia said.
Boccia has advocated pairing a debt ceiling increase with spending reforms to keep spending in check in the future.
