The terms of that deal allowed the government to borrow without limit through this Friday, when the suspension period ends and the current debt level of about $17.3 trillion instantly becomes the new limit.
The Treasury will still be able to use “extraordinary measures” for a while to keep its borrowing under the limit. However, as Treasury Secretary Jacob Lew explained in a recent letter to Congress, those measures will probably last for only a few weeks.
So despite hopes that the budget deal would break the chaotic cycle of fiscal crises, we’ll soon be facing another showdown unless swift action is taken.
That might not be as easy as many on Capitol Hill are assuming. Republicans generally favor adding yet-to-be determined conditions to any debt limit increase while Democrats insist that there can be no strings attached.
It might get resolved without a crisis this time, but the risk is still there and will return whenever the debt limit needs to be raised...