Congressional budget forecast to provide insight on U.S. debt ceiling
deadline
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[February 15, 2023]
By David Lawder
WASHINGTON (Reuters) - The Congressional Budget Office (CBO) on
Wednesday will provide some clarity on when the United States may
default on its payment obligations if lawmakers fail to raise the
federal borrowing limit amid a tense partisan spending stand-off.
The non-partisan fiscal referee agency's 2023 baseline budget forecast
also will reveal its first comprehensive analysis of federal deficits in
the wake of recent spending legislation, including President Joe Biden's
$430 billion climate and healthcare act and a military-heavy $1.66
trillion government funding package with more aid to Ukraine.
Those 10-year forecasts could enflame the debate over spending in
Congress and prompt calls for deeper cuts from Republicans who now
control the House of Representatives.
A second CBO report will describe the "current debt situation and CBO's
expectation about when the Treasury will no longer be able to pay its
obligations fully if the debt limit is not raised."
After hitting the $31.4 trillion borrowing cap on Jan. 19, Treasury
Secretary Janet Yellen said the Treasury can keep up payments on debt,
federal benefits and make other outlays at least through June 5 using
cash receipts and extraordinary cash management measures.
Some fiscal analysts say that Treasury can last further into the summer,
but the CBO forecast will provide a reliable benchmark, said Shai Akabas,
economic policy director at the Bipartisan Policy Center, a centrist
think tank in Washington.
"This will be a good-level set of the discussion because the only point
in time out there now is the June 5 reference in Secretary Yellen's
letter, which is not an X-date projection," Akabas said, using a common
term in Washington for when the Treasury will begin to default.
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The U.S. Capitol building is seen on the
day of U.S. President Joe Biden's State of the Union Address to a
joint session of Congress on Capitol Hill in Washington, U.S.,
February 7, 2023. REUTERS/Elizabeth Frantz
YEAR OF THE DEBT LIMIT
So far in 2023, not a day has gone by on Capitol Hill without
lawmakers jousting over the debt limit, as Democrats press for a
quick, clean increase in Treasury borrowing authority and
Republicans insist on first nailing down significant reductions in
future government spending.
Social Security and Medicare, the government's popular pension and
healthcare programs for the elderly, are at the center of the debt
limit/government funding debate, as both parties also jockey to
define the contours of the 2024 presidential and congressional
campaigns.
"There has been a Republican drumbeat to cut Social Security and
Medicare," Senate Majority Leader Chuck Schumer, a Democrat,
reminded reporters on Tuesday.
Republican Leader Mitch McConnell has labored, without much success
so far, to smother such talk.
"Let me say one more time. There is no agenda on the part of Senate
Republicans to revisit Medicare or Social Security. Period," he said
at a press conference.
(Reporting by David Lawder; Additional reporting by Richard Cowan;
Editing by Leslie Adler)
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