Congress’ deadline to raise the debt ceiling is likely to fall in October or November, according to a new report published Monday by the Bipartisan Policy Center.
The group, a nonprofit think tank, monitors the funds flowing in and out of the Treasury to estimate when it is likely to run out of cash.
The deadline has been the source of some uncertainty on Capitol Hill in recent weeks. Originally, it had appeared that Congress would need to act before the fall.
But in congressional testimony last month, Treasury Secretary Steven Mnuchin asked Congress to raise the debt ceiling before leaving for its August recess. Office of Management and Budget Director Mick Mulvaney warned that tax revenue was coming in more slowly than anticipated.
In a joint appearance with Canada’s finance minister on Friday, Mnuchin said he had backup plans for if Congress didn’t act by August, but warned that “the sooner they do it, the less uncertainty there is in the market.”
Tax collections may have slowed because of companies and individuals holding out on declaring taxable income in expectation of a tax cut, the Congressional Budget Office advised last week.
Yet the Bipartisan Policy Center calculated Wednesday that the best guess is still that the Treasury will be unable to guarantee the ability to make all payments on time and in full in October or November.
The federal debt is right at the limit of about $20 trillion. The Treasury is shifting funds around to make incoming payments, but can only do that for so long before it runs out of options.
Without the ability to issue new debt, the Treasury runs the risk of being unable to make a payment at some point, a prospect that experts view as highly risky. Missing a payment on the federal debt likely would be a major disruption to global financial markets.
One early test will be a military retirement trust fund payment scheduled for Oct. 2, the Bipartisan Policy Center said Monday.
This post originally appeared on Washington Examiner