Surprise: We Might Hit The Debt Ceiling Two Weeks Earlier Than Expected

[FarCenter]

Yesterday, we pointed out a new analysis from the Bipartisan Policy Center that provides a good, in-depth look at what would happen if the U.S. hits the debt ceiling.

The report also suggests that the U.S. could default on its debt as early as Feb. 15, which is about half a month sooner than was widely expected. The Bipartisan Policy Center says that the "X date" will come sometime between Feb. 15 and March 1.

"Our numbers show that we have less time to solve this problem than many realize," said Steve Bell, the senior director of the Economic Policy Project at BPC.

"We estimate that Treasury will exhaust its borrowing authority and no longer have sufficient funds to meet its obligations in full and on time at some point between Feb. 15 and March 1. It will be difficult for Treasury to get beyond the March 1 date in our judgment.”

Read more: http://www.businessinsider.com/debt-ceiling-deadline-february-15-march-obama-republicans-crisis-2013-1

Most of the Sandy disaster payments to NJ and NY will be stopped by the debt ceiling. Extra payments to disaster victims would cause the debt ceiling to be reached sooner.

[leftyohiolib]

1. that's right people, keep voting republicon

[dkf]

2. Why are we hitting this so much faster than expected? Is it a reflection on tax receipts?

This can't be a good indicator can it?

[FarCenter]

4. Their presentation has a day-by-day analysis; revenues are lot less than expenditures + tax refunds

Feb 15 on is a period when tax collections are at a normal rate, but tax refunds are starting to ramp up as people file their returns. A lot of tax revenues are going back out as refunds.

[dkf]

5. Refunds already? Based on what forms?

Odd.

[FarCenter]

6. Form 1040 for 2012?

http://www.irs.gov/pub/irs-pdf/f1040.pdf

1040EZ is also available.

PS - the tax software company I use sent an email saying that their software is updated with the latest fiscal cliff changes and ready for download or online filing.

[dkf]

7. But no w-2 or other financial docs.

[Yo_Mama]

9. A lot of people get those by Jan 15th

There's an awful lot of people who file 1040EZ with no interest income, no dividends, etc.

[FarCenter]

10. W-2 deadline is January 31

So people can start e-filing after they get them.

[Yo_Mama]

8. It's not that much faster than expected

Just a couple of weeks. Maybe one.

It is important info, because the hope should be that we don't wait until the last minute and get stampeded.

[dkf]

11. When they negotiated the amount of the ceiling increase we expected it to be reached

In feb 2013? So it's pretty much on schedule?

[Yo_Mama]

12. March 1st was about the guess

Here's the link to Geithner's letter:
http://www.treasury.gov/connect/blog/Documents/Sec%20Geithner%20LETTER%2012-26-2012%20Debt%20Limit.pdf

Note that he says normally the extraordinary measures would normally add about two months, but he couldn't be sure because of all the budgetary uncertainties (he didn't know tax rates then). If higher withholdings were occurring it would have added time. For the most part that did not happen except for payroll tax.

Note that he also wrote that if the tax issue were resolved more quickly and tax filings occurred more quickly, it would change the time line. Which happened. It's true that W2s weren't involved, but AMT and so forth was retroactive, so anyone affected by AMT wouldn't have been able to file.

So now filings are expected to be pretty fast and refunds will be also. Since if this is not resolved, later filers expecting a refund may be waiting for longer than otherwise, we can expect refund returns to be filed a little more quickly.

[Yo_Mama]

13. Oh, do you mean the 2011 debt ceiling increase?

They actually expected it to expire around the end of 2012 - maybe late November?

[dkf]

14. Oh...well that's good then.

Thanks!

[JustAnotherGen]

3. 'crisis'

Even in the link - we have the word "crisis". I'm so sick and tired of those petulant little snots and their scare tactics and antics to gin up fear in the face of a "crisis".