Debt-limit Politics Set to Reappear with Trump Budget

President Trump is expected to present his 2018 fiscal budget outline to Congress on March 16, the day after the suspension of the national debt limit is set to expire. The previous measure suspending the federal debt limit, which sets the ceiling for federal borrowing and must be periodically raised to prevent a government shutdown, was passed as part of a combined budget and debt limit deal negotiated between the Obama administration and congressional Republicans. On March 15, the federal debt will “reset” to its current level of over $18 trillion, and the political jousting on raising the debt limit will begin anew.

Fiscal hawks in Congress are worried that President Trump’s budget outline will neglect to address what they consider to be excessive government spending and the unsustainable trajectory of government entitlement programs, such as Social Security and Medicare. During the campaign, President Trump promised not to make any changes to these programs, and he has touted increased spending on the military and infrastructure.

Congressional Republicans who opposed the Obama administration’s budget and efforts to raise the debt ceiling are likely to face a challenging political environment over the next few months. Congress can delay raising the debt limit until late summer or early fall through the use of accounting measures by the Treasury Department. However, if fiscal conservatives insist on debt reduction measures being included, they will face opposition from Democrats demanding passage of a “clean” debt limit increase.


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