The U.S. government will now run out of cash in early March, thanks to the GOP tax law, the CBO says

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last updated 1 February 2018

Congress will have to the raise the debt ceiling in the first half of March, weeks earlier than forecast, or the federal government will run out of cash, the Congressional Budget Office said Wednesday. The CBO attributed the shortened deadline to the tax overhaul Republicans passed in late 2017, which will lower tax receipts by $10 billion to $15 billion a month starting in February. In all, the U.S. will take in $136 billion less tax revenue in 2018 under the new tax law, the nonpartisan congressional Joint Committee on Taxation estimates.

The Treasury Department has been taking emergency measures to keep the U.S. solvent since the debt limit was suspended Dec. 8, but if Congress doesn't raise the federal borrowing limit in early March, "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 CBO warned. The federal government ran a $23 billion deficit in December and a $666 billion deficit for all of 2017, the biggest shortfall since 2013.

Congress hates raising the debt ceiling but has never failed to do so, brinkmanship notwithstanding. Lawmakers also have to pass a spending bill by Feb. 8 to keep the government open, and deal with the immigration status of DREAMers before President Trump's March deadline. It's possible all these items will be rolled up into a big, must-pass package, The Washington Post notes, though House conservatives would balk "and it's unclear what political coalition will form this time to help raise the borrowing limit."

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.