The U.S. probably has enough borrowing capacity until at least September even as slower revenue and rising spending widens the budget deficit, according to analysts.
The U.S. budget gap increased to $88.4 billion in May from $53 billion a year earlier, according to Treasury Department figures released Monday. Revenue rose 7 percent while spending climbed 19 percent, the data showed.
“We estimate the Treasury will hit the debt ceiling sometime in early September,” Wells Fargo economists Michael A. Brown and Michael Pugliese said in an emailed note on Monday. “We expect that Congress will act on the debt ceiling before the August recess to alleviate the need to rapidly address the issue upon their return.”
While the government hit its borrowing limit in March, it’s been relying on special accounting maneuvers to stay under the current debt ceiling of nearly $20 trillion.
Only Congress can increase the legal limit on how much the government can borrow. The debate on raising it has grown fraught in recent years as lawmakers used the debate as a leverage for spending controls. Treasury Secretary Steven Mnuchin has called for a ”clean” vote on the legislation that has no strings attached. Congress may look to pair the debt-increase bill with conditions.