Debt default could begin Oct. 18

WASHINGTON – Absent a late-hour compromise on Capitol Hill, the U.S. government will run out of money to pay its debts and could begin defaulting on its obligations, piecemeal or all at once, around Oct. 18, according to a report Tuesday.

The Treasury Department officially ran out of conventional funding sources and has been relying on so-called extraordinary measures to pay creditors since May 17. Those measures are expected to run dry somewhere between Oct. 18 and Nov. 5, according to the Bipartisan Policy Center, a think tank.

The bickering political parties now face the prospects of a potential government shutdown if they don’t pass a budget or a resolution to keep funding government before Sept. 30. Weeks later, the special measures that amount to moving funds around run out, the new report said, and the federal government can only rely on incoming revenues for cash on hand of about $50 million per day after mid-October.

The center’s budget experts fear that around Oct. 18, the Treasury Department would be roughly $106 billion short of money needed to pay all the bills due for the next 20 business days.