Clarity on Debt Ceiling Expected Next Week

Congress is expected to receive additional clarity from the Treasury Department as to when the federal government could run out of borrowing power — a key factor that could accelerate consideration of the GOP reconciliation bill. Specifically, Treasury Secretary Scott Bessent is reportedly slated to provide Congress with an update as to when the “X date” will fall. According to a projection from the Congressional Budget Office (CBO) earlier this month, the federal government could run out of “extraordinary measures” to prevent a default by August or September, but this could get pushed earlier into the late spring or summer if tax revenue comes in below expectations. To the extent that Treasury’s estimate aligns closer to June or July, that will be a catalyst for congressional Republicans to mobilize on reconciliation to raise the debt ceiling as soon as possible. On the other hand, an August or September X date could also provide some GOP lawmakers with a justification to hold off while lingering debates over the total cost of the package, cuts to public benefit programs like Medicaid and SNAP, as well as key tax policy decisions are resolved.