The U.S. Has Hit The Debt Ceiling. How Long Does Congress Have To Fix It?

The government exceeded its borrowing limit on Donald Trump’s second day in office, leaving the new government with an uncertain deadline for the ‘X-Date’ when the U.S. can no longer pay its bills.

On Tuesday, the total debt owed by the U.S. government overtopped the $36.1 trillion it’s allowed to legally borrow, setting the stage for a scramble by Congress and the White House to fix it before the U.S. fails to pay its bills and sets off a financial crisis.

On Wednesday, the Treasury Department began undertaking “extraordinary measures”—essentially shuffling money around—that will buy the government some time before the U.S. can no longer pay its bills, according to a letter to Congress by outgoing Treasury Secretary Janet Yellen. She did not estimate how much time, exactly, the measures would buy.

If the ‘X-Date’ comes and goes, the government would enter uncharted territory, possibly defaulting on the national debt, leaving Social Security benefits unpaid, and facing other potentially severe financial and economic consequences.

The debt ceiling timeline depends on unknown factors, including how much revenue the IRS collects this tax season and how much the government spends responding to the recent wildfires in California and other disasters, the Bipartisan Policy Center, a centrist think tank, said in a commentary.

The Committee for a Responsible Federal Budget, a think tank that promotes balancing the federal budget, estimated in a commentary that the X-Date will likely occur sometime in the spring or summer.

The debt ceiling has become a political flashpoint in recent years, as some lawmakers have threatened to allow the debt ceiling to lapse in order to extract concessions from the opposing party.

Past debt ceiling showdowns have ended with the ceiling being raised or suspended for a certain period of time, resulting in periodic clashes. Economists say the U.S. could face a financial crisis, recession, and millions of jobs lost if Congress fails to extend the debt ceiling in time.

Trump has called for the debt limit to be eliminated entirely, shutting down the possibility of future showdowns over the ceiling, but Republican lawmakers, who now control the House and Senate, rejected the idea as recently as December.