Two Potential Scenarios, Will Congress Fix US Debt Ceiling?

The US government could reach the maximum amount of money that the Department of the Treasury is allowed to borrow by 15 December.

If Congress doesn’t act to fix that limit, known as the debt ceiling, there could be big consequences for the timeliness of government payments that the nation relies on.

Congress still needs to act before the holiday recess. There is a higher amount of pressure at the beginning that date range due to the fact that the Treasury Department could already have low cash levels while large payments will come due at the end of the year.

A USD 118 billion transfer to the Highway Trust Fund scheduled for Dec. 15 will add to the government’s debt.

Within several weeks of running out of cash, the Treasury Department would be unable to pay approximately 35% of all payments due, including those to individuals and families, according to the analysis.

That government would have two likely options either to prioritize some payments over others, or delay paying all of its bills.