Thanks to President Donald Trump's $1.5 trillion tax cut, the government has less than two months to find money before the United States hits its spending limit.
"The Congressional Budget Office projects that if the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted and the Treasury will most likely run out of cash in the first half of March 2018," explained the Congressional Budget Office in a recent report. "If that occurred, the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both."
The report pointed out that prior to the passage of Trump's tax cuts, the Congressional Budget Office predicted that the Treasury Department would run out of money in either late March or early April of this year. It was the passage of Trump's tax cuts, it argued, that caused the CBO to revise its original projection to a "range of possible dates as falling earlier in March."
The origin of this crisis can be traced to the decision by the Treasury Department to take emergency steps to avoid falling behind on its payments after Congress allowed the deadline for dealing with the debt ceiling to pass, according to The Washington Post. The debt ceiling had been previously suspended until a deadline of Dec. 8, 2017, but that date came and went without any long-term solution being implemented. As a result, the Treasury Department will soon be no longer able to use the emergency measures it has employed so far to stave off a major crisis.
Further exacerbating matters is the fact that the government will shutdown again if Congress can't work out a compromise regarding immigration reform by Feb. 8.
Although the Trump administration continues to tout its $1.5 trillion tax cut as a success and pushes for other expensive projects, including $200 billion in infrastructure spending and $25 billion for border security, Treasury Secretary Steve Mnuchin told Congress on Tuesday that they are concerned about the debt, according to The New York Times.
"The president is very much concerned about the rate of increase of the debt and particularly the rate that it grew over the last eight years. Over time we need to figure out where we can have government savings to deal with the deficit," Mnuchin told Congress.
Shares