The analysis raises the possibility that lawmakers might have to raise the nation’s borrowing limit before the election, a scenario they took pains to avoid in the debt deal passed in August.
Now, partially due to lower than expected tax receipts, the nation could reach the $16.4 trillion debt limit as early as late November, according to an analysis from the Bipartisan Policy Center (BPC) to be released Friday.
Just a few weeks ago, the Center has estimated the debt-limit wouldn’t be reached until the spring of 2013.
But continued sluggishness in the economy, coupled with the recent payroll package that adds to the deficit, is casting doubt on that timeframe, raising the possibility of a bitter fight over deficit spending at the height of a presidential election year.
Last year’s fight over the debt ceiling brought the nation to the brink of default and resulted in the first-ever downgrade of U.S. securities. The last-minute deal to raise the borrowing limit by $2.1 trillion was supposed to tide the government over until the end of 2012, by which point electoral politics would be in the rearview mirror.
But analysts at the BPC said it’s looking increasingly likely that those best-laid plans will be dashed by “unexpected circumstances.”