Debt Ceiling Issue Arising Sooner

One big budgetary testing point will arrive ahead of the budget proposal. An agreement of last fall suspended the federal debt ceiling through February 7, an event that has triggered brinksmanship many times in the recent past. Fiscal conservatives have said they again will try advocate for deficit reduction steps tied to raising the limit, although it remains unclear what those steps might be; the chained CPI idea is one prospect that has been raised. Commonly, the response in similar situations has been to use several special budgetary maneuvers, including on involving the TSP’s government securities G fund, to push off a firm decision. In the past, such maneuvers have bought several months of extra time, but the Treasury Department has said that it would only be a matter of a few weeks this time, in part due to tax refunds due to be paid out at this time of year.