The kabuki dance between the White House and Congress over the government debt ceiling may be coming to a theater near you again sooner than you think. A new report estimates that the $16.4 trillion limit established just last August may be reached only a few weeks after Election Day (Nov. 6), The Hill
That timing means Congress and the White House may have to raise the ceiling before the election, a development they sought to avoid in last August’s deal. The problem is that tax revenue has come in lower than expected. Thus, the $16.4 trillion figure could be reached as soon as late November, according to the Bipartisan Policy Center’s analysis.
The center has changed its view markedly from just a few weeks ago, when it forecast the debt limit wouldn’t be hit until the spring of 2013. Its assumptions were roiled by the economy’s continued slow recovery and the agreement earlier this month to extend the payroll tax cut, which will expand the deficit.
"Congress, the administration and outside analysts believed that this increase [in August] would allow federal borrowing under the limit until well into 2013," Steve Bell, senior director of economic policy for the center, wrote. "Due to unexpected circumstances . . . that belief appears increasingly likely to have been misguided."
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