Congress grapples with debt ceiling crisis, July 23, 2011

On this day in 2011, President Barack Obama summoned congressional leaders to an emergency meeting at the White House to deal with a federal debt crisis after failed efforts to strike a bipartisan “grand bargain” — one that House Speaker John Boehner (R-Ohio) had said would have cut $3 trillion to $4 trillion in spending over 10 years.

“I want them here at 11 a.m. tomorrow,” Obama told reporters after his talks with Boehner had reached an impasse. “They are going to have to explain to me how it is that we are going to avoid default.”

Obama told congressional leaders at their Saturday meeting that global markets could react adversely to the failure on Friday to strike a deal, a point reinforced by Treasury Secretary Timothy Geithner. The hourlong meeting broke up shortly before noon without resolving the impasse.

“We have run out of time for politics. Now is the time for cooperation,” Senate Majority Leader Harry Reid, (D-Nev.) said after the failed session.

Later that day, Boehner met separately with key Republican lawmakers in a further bid to cobble together a deficit-reduction package that could pass muster in the GOP-controlled House. “We are working, and I’m confident there will be a resolution,” Boehner told fellow House Republicans during an afternoon conference call. “There has to be.”

They deadlocked over major elements of an agreement even as several lawmakers said they were determined to make a new compromise public on Sunday before financial markets opened in Asia. But that bid also soon foundered.

On July 31, Obama and Boehner announced that an agreement had been reached to raise the $14.3 trillion U.S. debt ceiling until after the 2012 election. The president signed the Budget Control Act of 2011 into law on Aug. 2, the date Treasury officials said the nation’s borrowing authority would have expired.

On Feb. 9, 2018, President Donald Trump signed into law the Bipartisan Budget Act of 2018, suspending the debt limit through March 1, 2019.

Absent further action by Congress, when the suspension expires, the U.S. Treasury will once again find itself up against the debt limit. At that point, the secretary would begin deploying so-called extraordinary measures, accounting maneuvers that allow for full government operations to continue for an additional, but necessarily limited, period.

When such extraordinary measures run out and Treasury depletes its cash reserves, the federal government would reach the “X Date” — the day when the U.S. government is unable to meet its obligations in full and on time. A preliminary analysis by the Bipartisan Policy Center indicates Treasury will have enough cash on hand, given its ability to deploy extraordinary measures, to operate the federal government through at least the summer, if not the fall of 2019, thus encompassing most of Trump’s term in the White House.

As of April 30, the total national debt amounted to about $21 trillion.

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