Because of a deal struck in Fall 2015 to avoid a debt ceiling showdown during the 2016 election season, the statutory debt limit expiration is suspended through March 15, 2017. If Congress fails to raise the debt limit by then, the Treasury Department is expected to undertake so-called "extraordinary measures" to ensure the U.S. government does not exceed its statutory borrowing authority. Exactly how long these measures will remain effective is unclear, though analysts agree that the impact of a failure to raise the debt ceiling would most likely not be felt for at least a few months, and will be further ameliorated by the April 15 individual income tax payments. Some analysts have concluded that the government will not exhaust all of its options until September 2017, a date that coincides with the end of the fiscal year.

The Trump Administration has not yet indicated its approach to the debt limit debate, which is routinely a tough vote for Republicans. Treasury Secretary Steven Mnuchin said during his confirmation hearing that "Honoring the U.S. debt is the most important thing. ... I would like us to raise the debt ceiling sooner rather than later." Mnuchin made it clear that he does not think that the Treasury should try to "prioritize debt" if Congress fails to raise the debt limit in time. However, Director of the Office of Management and Budget Mick Mulvaney is a deficit hawk who, when he served in Congress, voted four times against increasing the debt limit. Director Mulvaney also publically questioned whether failing to raise the ceiling would necessarily hurt the U.S. or cause the country to default on its debt.

Takeaway: During the Obama Administration, congressional Republicans attempted to utilize the debt limit deadline to force the Administration to accept passage of a variety of Republican-backed measures in exchange for their support. It remains unclear whether the House Freedom Caucus (or for that matter, congressional Democrats) will push for concessions in exchange for their support to raise the debt limit. Also, expect high visibility disputes within the Trump Administration if the Treasury Department begins to exhaust its "extraordinary measures."