As you have likely heard, it is anticipated that the United States will reach its debt limit in late February of this year. U.S. Department of Treasury Secretary Jacob Lew has warned that the ‘debt ceiling’- the restriction on how much debt the Treasury Department is allowed to issue - needs to be raised by February 7, 2014, which is the date that the funding package Congress passed in October to end the government shutdown runs out. However, after February 7, if Congress has not yet passed a new debt limit, the nation can avoid a breach, at least in the short-term, by using accounting maneuvers.
This time, both Democrats and Republicans agree that the debt limit needs to be raised. Democrats are vying for a clean raise with no policies attached. Republicans are likely to pass a clean raise even though some members of the party want to attach policy. The government shutdown last year showed Republicans that President Obama is unwilling to compromise on the budget and the Republican Party does not want to default on the nation’s debt.
However, if the debt ceiling issue is delayed and the treasury runs out of funds then the government will again go into a partial shutdown. At the beginning only none essential government employees would be laid off, but cuts would deepen with time and could quickly become critical.