“We’re going to have some political maneuvering around the scoring of this bill,” Bill Hoagland, a longtime Senate Budget aide who is now with the Bipartisan Policy Center, said.
Another question is how the record revenues affect estimates for when the federal government is likely to hit the statutory debt limit, which now stands at just under $31.4 trillion. When lawmakers last boosted it, late last year, they estimated it would be enough to last until early 2023.
Crandall at Wrightson figures the government can probably last until 2024 without an increase. But Hoagland is less optimistic, still seeing the ceiling becoming binding in the first quarter of 2023. Brian Smith, the Treasury’s deputy assistant secretary for federal finance, said last week that it’s “premature” to comment on the debt ceiling.
In the end, the great tax haul of spring 2022 may prove something of a high-water mark.
“I would caution anybody from drawing too much of a conclusion on what we can do with all this found money, because the risks of recession are growing and tax receipts crater when we have a recession,” said Gordon Gray, the director of fiscal policy at the American Action Forum. “I wouldn’t count our winnings at the table.”
--With assistance from Liz Capo McCormick and Alex Tanzi.
This article was provided by Bloomberg News.