When is the U.S. government going to run out of money? It’s a crucial question for bondholders, federal beneficiaries and lawmakers who need to raise the borrowing limit or risk a potential catastrophic default on U.S. debt. Treasury Secretary Janet Yellen has said she has a “high degree of confidence” her agency can comfortably pay the bills “through Dec. 3,” exactly one month from today. Does that mean we’re going off a cliff on Dec. 4? That’s not exactly what Yellen is saying. Right now, the Treasury is using emergency cash-conservation measures to keep financing government operations. Eventually, the secretary will notify Congress when she thinks those measures will be exhausted — that is, when the agency could begin to miss payments on its obligations. But there’s enough uncertainty that she hasn’t done that yet, even as outside forecasters estimate the date could be well beyond Dec. 3. Why the uncertainty? One of the biggest unknown factors is the fate of the bipartisan infrastructure bill in Congress. The legislation would provide $118 billion to replenish the Highway Trust Fund — money that would need to be transferred from the Treasury’s general account, reducing the government’s cash cushion. Even if Congress passes the measure in the next month, it’s not clear whether the Treasury would need to transfer the funds immediately, said Shai Akabas, economic policy director at the Bipartisan Policy Center. The center estimates the debt limit X-date, as it’s known, could fall some time in mid-December through mid-February — in line with other private estimates — but that doesn’t account for a potential transfer to the Highway fund, Akabas said. “I think that the Dec. 3 date is a place where, even if the money is transferred, Treasury feels comfortable and confident that they will be able to get through that date,” Akabas said. Louis Crandall, chief economist at Wrightson ICAP and a former Treasury official, says Treasury “might get uncomfortably close” to the X date at some point between Dec. 6 and Dec. 14 if they are required to transfer the highway funds at some point during the next month. If Treasury determines they don’t have to transfer the highway funds immediately, or if the infrastructure bill is delayed past Thanksgiving, that could push the potential X-date back further. The next key deadline is Dec. 15, when the government receives an influx of estimated corporate tax payments, which could give them enough of a cash cushion to finance government operations until late December. Call for clarity: Some former Republican aides who follow the issue have said Yellen should be more clear about when the Treasury expects to run out of cash, to give lawmakers and markets plenty of time to know what to expect. When it looked like Congress might not raise the debt limit this fall, Yellen sent a letter on Sept. 28 notifying lawmakers that the Treasury would likely exhaust its emergency measures on Oct. 18, three weeks later. “The longer we go without a letter, the more implausible it is that it’s the first week of December,” said Rohit Kumar, a former aide to Senate Minority Leader Mitch McConnell (R.-Ky.) and the head of PricewaterhouseCoopers’ national tax practice. “It’s very clear that nobody is paying attention to this,” Kumar added. “If this is going to be an early- or mid-December exercise, then people need to start thinking hard about what to do about it.” Why the focus on Dec. 3? That’s also the date Congress must pass a federal spending measure to avoid a government shutdown. Earlier this year, Democrats had hoped to link the spending bill with a debt limit vote, but Republicans objected, before eventually agreeing to a temporary spending patch and debt limit increase that would both last until early December. A much later X date means Democrats will have to decouple these two issues, and deal with the debt limit later, possibly not until early next year. That could create a bit of a cooling off period that may make it easier to raise the ceiling with Republican support, Kumar says. “If it’s a 2021 must-do event, and we assume somehow Democrats get a reconciliation bill across the finish line, then it’s really hard to see how in close proximity to that we get Republican support for increasing the debt limit,” he said. IT’S WEDNESDAY — The Fed wraps up its two-day policy meeting today, and we’ll definitely be watching this press conference with popcorn. What’s the question you’re most hoping reporters ask Chair Jay Powell? Let us know, and send us your tips: kdavidson@politico.com, aweaver@politico.com, or DM us on Twitter @katedavidson. | 
