Congress

The Debt Ceiling is Coming

Written by SK Ashby

The U.S. Treasury Department quietly informed the world yesterday afternoon that the "extraordinary measures" they've been using to avoid hitting the national debt ceiling will be exhausted at some point between July and December of this year.

“Treasury expects that the extraordinary measures will be exhausted sometime in the second half of 2019,” Treasury Deputy Assistant Secretary Brian Smith said in a statement announcing the department’s quarterly debt issuance plans.

Wall Street also sees Treasury exhausting its borrowing authority in the third or fourth quarter, according to the minutes of a meeting of a Treasury advisory committee of financiers.

To say that we'll hit the debt ceiling in the "second half" of the year is a wide range of time, but assuming we'll reach the ceiling at some point in the late third or early fourth quarter of the year, that means we'll hit the ceiling around the same time that funding the government in fiscal 2020 will be necessary.

Considering that Trump will likely be in full campaign mode by the time fiscal 2020 arrives on October 1st, I personally anticipate that he'll at the very least threaten to shut down the government again if congressional Democrats won't give him money for his fantasy border wall or more funding for the indefinite detention of immigrants.

At the same time, I expect he will play chicken with the debt ceiling at least as long as it takes for Wall Street to have a really bad day while he's on the campaign trail.

The fact that nothing scares Trump more than a tanking stock market may be the only thing that prevents us from breaching the debt ceiling and seeing another government shutdown.