The Deadly Dates of a Debt-Ceiling Standoff

What day will the government default? Nobody knows for sure, but here are a few of the most likely dates.

A statue of former Treasury Secretary Albert Gallatin stands guard outside the Treasury Building in Washington.   
National Journal
Patrick Reis
Add to Briefcase
Patrick Reis
Sept. 27, 2013, 8:54 a.m.

Nobody in the White House, nobody in Con­gress, and nobody any­where else knows the ex­act date the gov­ern­ment will be­gin de­fault­ing on its debts.

Treas­ury Sec­ret­ary Jac­ob Lew has handed Con­gress an Oct. 17 dead­line for rais­ing the debt lim­it, but he’s only giv­ing them his best guess.

The lack of a fi­nal dead­line could be a prob­lem for Con­gress, which is in the pro­cess of craft­ing a last-minute budget deal to stave off a gov­ern­ment shut­down.

But the debt ceil­ing’s tim­ing doesn’t work like a gov­ern­ment shut­down, where all parties in­volved know months ahead ex­actly when the cur­rent budget will ex­pire. In­stead, de­fault hap­pens whenev­er the Treas­ury doesn’t have the money on hand to pay its in­com­ing bills.

The rate at which those bills ar­rive, however, is vari­able. There are a few dates in the weeks to come where the in­voices will be par­tic­u­larly large, the fin­ances will be par­tic­u­larly tight, and the danger of de­fault will run the highest.

Here are the dates that have ana­lysts at the Bi­par­tis­an Policy Cen­ter es­pe­cially anxious:

Oct. 17-18 — The “X Date”: Lew picked mid­night on Oc­to­ber 17 for a debt-ceil­ing dead­line, and the BPC ana­lysts agree, hav­ing set an “X Date” that starts the first minute of Oc­to­ber 18. From that mo­ment on, the cen­ter says, the gov­ern­ment is at real risk of de­fault at any time, be­cause it will be out of bor­row­ing room and will be wager­ing that its un­pre­dict­able rev­en­ue streams will be enough to cov­er the in­com­ing bills.

Oct. 23 — So­cial Se­cur­ity’s First Hic­cup: The fed­er­al gov­ern­ment owes the na­tion’s seni­ors $12 bil­lion in So­cial Se­cur­ity pay­ments. There are big­ger pay­ments to come, but ima­gine for a mo­ment the polit­ic­al fal­lout of Wash­ing­ton fail­ing to de­liv­er even a tiny frac­tion of what it owes to the eld­erly. That’s the sort of move that gets in­cum­bents tossed out of of­fice, as well as trig­ger­ing an all-out mes­saging blitz to pin the blame on the oth­er party.

Novem­ber 1 — Day of the Debt-Ceil­ing Dead: It all comes to a head at the start of Novem­ber, when Treas­ury will be hit with, at least, a com­bined $58 bil­lion worth of bills. That in­cludes $18 bil­lion in Medi­care pay­ments, an­oth­er $25 bil­lion for So­cial Se­cur­ity, and $12 bil­lion in pay­ments to act­ive mil­it­ary and vet­er­ans. Toss on top of that a $6 bil­lion in­terest pay­ment on the pub­lic debt that comes due Oct. 31, and the BPC ana­lysts see de­fault as near-cer­tain without a raise in the debt ceil­ing.

“I think it’s ex­ceed­ingly un­likely they can make it past Hal­loween,” said Steve Bell, a former top GOP staffer and the dir­ect­or of BPC’s eco­nom­ic-policy pro­ject. “The Lord in­deed has a great sense of hu­mor.”

Read more about BPC’s debt ceil­ing cal­en­dar here.

What We're Following See More »
Bill Murray Crashes White House Briefing Room
1 hours ago

In town to receive the Mark Twain Prize for American Humor at the Kennedy Center, Bill Murray casually strolled into the White House Briefing Room this afternoon. A spokesman said he was at the executive mansion for a chat with President Obama, his fellow Chicagoan.

CFPB Decision May Reverberate to Other Agencies
4 hours ago

"A federal appeals court's decision that declared the Consumer Financial Protection Bureau an arm of the White House relies on a novel interpretation of the constitution's separation of powers clause that could have broader effects on how other regulators" like the Office of the Comptroller of the Currency and the Federal Housing Finance Agency.

Morning Consult Poll: Clinton Decisively Won Debate
4 hours ago

"According to a new POLITICO/Morning Consult poll, the first national post-debate survey, 43 percent of registered voters said the Democratic candidate won, compared with 26 percent who opted for the Republican Party’s standard bearer. Her 6-point lead over Trump among likely voters is unchanged from our previous survey: Clinton still leads Trump 42 percent to 36 percent in the race for the White House, with Libertarian nominee Gary Johnson taking 9 percent of the vote."

Twitter Bots Dominated First Debate
5 hours ago

Twitter bots, "automated social media accounts that interact with other users," accounted for a large part of the online discussion during the first presidential debate. Bots made up 22 percent of conversation about Hillary Clinton on the social media platform, and a whopping one third of Twitter conversation about Donald Trump.

Center for Public Integrity to Spin Off Journalism Arm
5 hours ago

The International Consortium of Investigative Journalists, the nonprofit that published the Panama Papers earlier this year, is being spun off from its parent organization, the Center for Public Integrity. According to a statement, "CPI’s Board of Directors has decided that enabling the ICIJ to chart its own course will help both journalistic teams build on the massive impact they have had as one organization."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.