Is there even a point in having a debt ceiling anymore, when the government just raises it when it’s near the verge of running out of cash? As Thomas Sowell once perfectly put it, “what the national debt ceiling does is allow Democrats to gain votes by spending the government’s money — and then force Republicans to share responsibility for raising the national debt ceiling, under threat of being blamed for shutting down the government if they don’t.”At the rate the government is currently blowing through money, the debt ceiling will need to be raised in October, unless the government is to default on its debt (which will not be happening).
According to the Washington Free Beacon, a new report from the Congressional Budget Office, “projects that if the debt limit remains unchanged, those measures will be exhausted and the Treasury will most likely run out of cash in early to mid-October.” The amount of money the government spends on programs and the amount it collects in taxes could change from the budget office projections, so the office warns that the Treasury could run out of funds even earlier.
Currently, the federal deficit stands at $693 billion, which is an increase of $134 billion than what it projected in January. The federal government has an outstanding debt of $19.8 trillion, which includes $14.3 trillion in public debt and $5.5 trillion held by government accounts.
According to the report, unless the debt limit is raised, the Treasury will not be able to issue additional debt.“That restriction would ultimately lead to delays of payments for government programs and activities, a default on the government’s debt obligations, or both,” the budget office said. “CBO estimates that without an increase in the debt limit, the Treasury, by using all available extraordinary measures, would most likely be able to continue borrowing and have sufficient cash to make its unusual payments until early to mid-October of this year.”
Perhaps the battle over raising the debt ceiling will be different this time with Republican majorities in the House and Senate. There won’t be any Democrat demands to cater to, so perhaps the actual fiscal conservatives in Congress will use the opportunity to push for lower spending in light of the need to raise the debt ceiling once again.
But then again, that’s being optimistic.[Note: This post was written by Matt Palumbo. He is a co-author of the new book A Paradoxical Alliance: Islam and the Left, and can be found on Twitter @MattPalumbo12]