When the debt ceiling is lifted, it not only pushes back the date when the U.S. will reach the limit—it also restarts the clock on the "extraordinary measures" that Treasury can use to keep things chugging along while lawmakers pummel each other.
According to Citigroup's Andrew Hollenhorst, the current deal would move the hard deadline until March 2014.
Based on press reports, the short-term debt ceiling extension expected to be passed by Congress would suspend the debt ceiling until February 7. However, Feb. 7 would only be a "soft" deadline since Treasury would then be able to engage in "extraordinary measures" to open up "headroom" under the debt ceiling. These measures may be worth around $200 billion of additional debt capacity. Based on a rough estimate, described below, we think the new "hard" debt-ceiling deadline, when Treasury is at risk of being unable to pay all its obligations, is likely to be in March 2014.
We base our rough estimate on the historical experience in 2013. Starting Feb. 7, 2013, Treasury ran a $144 billion cumulative deficit through Feb 28, 2013 and $270 billion cumulative deficit through April 1. Roughly speaking, if cash-flows in 2014 are similar to 2013, this would put the "hard" ceiling date under the proposed plan in March 2014. We plan to update this estimate, taking into account potential differences between 2013 and 2014 cash flows, in the near future.
—By CNBC's John Carney. Follow him on Twitter @Carney