In the first year of the Trump administration, Capitol Hill has specialized in drama. From health care to taxes, decisions affecting large swaths of the economy have come down to the last minute. Months of wrangling over the repeal of the Affordable Care Act culminated in an ignominious defeat. Tax reform also came down to the wire in the Senate, narrowly squeaking through in a middle-of-the-night roll call. Next up, a debt limit drama could be on the way.
The debt limit’s suspension quietly ended on Dec. 8, the same day policymakers chose once again to punt on negotiating a budget agreement. In what has become ordinary practice over the past seven years, Treasury Secretary Steven Mnuchin announced the implementation of so-called extraordinary measures — accounting maneuvers that temporarily give Treasury extra borrowing room (and thus, cash) to pay the government’s bills while operating at the debt limit. BPC’s projection is that those measures would last until March, although tax reform, spending cap adjustments, and additional disaster relief could shorten the time frame.