There will be only 9 legislative days before fiscal 2014 starts on October 1. Approximately 15 calendar (but no more than 10 legislative) days later, the Treasury says the government will not have the cash it needs to pay all its bills. At that point either the federal debt ceiling will have to be raised so the government may borrow more or a technical or actual default will occur.
The start of the fiscal year has been known for since 1974 when it was changed by the Congressional Budget Act. But the deadline by which the debt ceiling needs to be raised is always a moving target. The latest estimate came yesterday when the Treasury released a letter saying it would have only $50 billion in cash by the middle of October and will be very close to the point at which all bills cannot be paid.
The Treasury’s letter only indicates that #cliffgate won’t be settled quickly.
In the current political environment, when Republicans disagree with Republicans almost as much as they disagree with Democrats, House Democrats are less inclined than ever before to supply the votes House Republicans need to pass legislation, the White House insists it won’t negotiate on the debt ceiling and tax and entitlement reform are years away, it’s simply not credible to expect that the differences over fiscal 2014 funding and a debt ceiling increase will be settled in 25 days. It would be all-but-impossible to do that even if the White House and Congress were controlled by the same political party and that party had a filibuster-proof majority in the Senate.
Yesterday’s Treasury letter does two things.
First, it makes a temporary fix — a short-term continuing resolution to keep the government funded and a small increase in the debt ceiling to prevent a default — much more likely. If the October 15 date mentioned by Treasury doesn’t change, there just won’t be time to do anything else.
Second, it means #cliffgate will continue through the fall and into the winter.