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According to the Bipartisan Budget Act of 2015 (Public Law 114-74), the current suspension of the debt ceiling expires at the end of the day Wednesday, March 15. Following this date, the US Treasury can avoid defaulting on the federal debt only by using “extraordinary measures.” Indeed, Treasury Secretary Mnuchin sent a letter to Speaker Ryan on March 8, stating that the Treasury will start using these measures on March 16. He also asked Congress address the matter in a way that avoids jeopardizing the full faith and credit of the US government. These measures (i.e., accounting steps) will most likely allow the federal government to make it to early fall before it runs up against a hard ceiling on the debt.
Suspension or No Suspension?
The first question facing Congress on the debt ceiling is whether to set a new debt ceiling or simply to extend the current suspension. What should Congress do? Without hesitation, I recommend that Congress set a new ceiling that aligns with the state of the art balance budget amendment that is being proposed by the States.