Federal Debt and the Statutory Limit, February 2023

"The debt limit—commonly called the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public or to other federal agencies. The amount is set by law and has been increased or suspended over the years to allow for the additional borrowing needed to finance the government’s operations. On December 16, 2021, lawmakers raised the debt limit by $2.5 trillion to a total of $31.4 trillion.1 On January 19, 2023, that limit was reached, and the Treasury announced a “debt issuance suspension period” during which, under current law, it can take well-established “extraordinary measures” to borrow additional funds without breaching the debt ceiling.

The Congressional Budget Office projects that, if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will be exhausted between July and September 2023—that is, in the fourth quarter of the current fiscal year. The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from CBO’s projections. In particular, income tax receipts in April could be more or less than CBO estimates. If those receipts fell short of estimated amounts—for example, if capital gains realizations in 2022 were smaller or if U.S. income growth slowed by more in early calendar year 2023 than CBO projected—the extraordinary measures could be exhausted sooner, and the Treasury could run out of funds before July.

If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully.2 As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both.."
Federal debt 

The Budget and Economic Outlook: 2018 to 2028

"In CBO’s baseline projections, which incorporate the assumption that current laws governing taxes and spending generally remain unchanged, the federal budget deficit grows substantially over the next few years. Later on, between 2023 and 2028, it stabilizes in relation to the size of the economy, though at a high level by historical standards.

As a result, federal debt is projected to be on a steadily rising trajectory throughout the coming decade. Debt held by the public, which has doubled in the past 10 years as a percentage of gross domestic product (GDP), approaches 100 percent of GDP by 2028 in CBO’s projections. That amount is far greater than the debt in any year since just after World War II. Moreover, if lawmakers changed current law to maintain certain current policies—preventing a significant increase in individual income taxes in 2026 and drops in funding for defense and nondefense discretionary programs in 2020, for example—the result would be even larger increases in debt..."

Federal budget

Federal Debt and the Statutory Limit, January 2018

"The debt limit—commonly called the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public or to other federal agencies. The amount is set by law and has been increased over the years to finance the government’s operations. The limit was suspended on September 8, 2017. On December 8, 2017, that suspension expired, and the Secretary of the Treasury announced a “debt issuance suspension period” during which existing statutes allow the Treasury to take “extraordinary measures” to borrow additional funds without breaching the debt ceiling.

The Congressional Budget Office projects that if the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted and the Treasury will most likely run out of cash in the first half of March 2018. If that occurred, the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both. (The timing and size of revenue collections and of outlays over the next few weeks could differ noticeably from CBO’s projections, however, so the extraordinary measures could be exhausted and the Treasury could run out of cash either earlier or later than CBO projects.)..."
Federal debt Jan. 2018

Federal Debt and the Statutory Limit, March 2017

"The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations. Currently, there is no statutory limit on the issuance of new federal debt because the Bipartisan Budget Act of 2015 (Public Law 114-74), enacted in November 2015, suspended the debt ceiling through March 15, 2017. On March 16, the limit will be reset to reflect cumulative borrowing through the period of suspension...."
Federal debt

Federal Debt and the Statutory Limit, August 2015

"The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations. In March, the debt ceiling was reached, and the Secretary of the Treasury announced a “debt issuance suspension period.” During such a period, existing statutes allow the Treasury to take a number of “extraordinary measures” to borrow additional funds without breaching the debt ceiling. The Congressional Budget Office projects that if the debt limit remains unchanged, those measures will be exhausted and the Treasury will run out of cash between mid-November and early December.1 At such time, the government would be unable to fully pay its obligations, a development that would lead to delays of payments for government activities, a default on the government’s debt obligations, or both..."
Federal debt

The Debt Limit Since 2011

"The Constitution grants Congress the power to borrow money on the credit of the United States— one part of its power of the purse—and thus mandates that Congress exercise control over federal debt. Control of debt policy has at times provided Congress with a means of raising concerns regarding fiscal policies. Debates over federal fiscal policy have been especially animated in recent years. The accumulation of federal debt accelerated in the wake of the 2007-2008 financial crisis and subsequent recession. Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years..."
Debt limit

Debt Limit since 2011

"Total federal debt can increase in two ways. First, through debt increases when the government

sells debt to the public to finance budget deficits and acquire the financial resources needed to

meet its obligations. This increases debt held by the public . Second, through debt increases when

the federal government issues debt to certain government accounts, such as the Social Security,

Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases

debt held by government accounts. The sum of debt held by the public and debt held by government accounts is the total federal debt..."

Debt limit

Federal Debt and the Statutory Limit, November 2013

"The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations..."
Federal Debt

The Debt Limit: History and Recent Increases

"Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases debt held by the public. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases debt held by government accounts..."
Debt Limit

CBO Federal Debt and the Statutory Limit, September 2013

"The Congress has traditionally placed a limit on the total amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. Law- makers have enacted numerous increases to the debt limit—commonly known as the debt ceiling—some of which have been temporary but many of which have been permanent..."

Federal Debt

Foreign Holdings of Federal Debt

"This report presents current data on estimated ownership of U.S. Treasury securities and major holders of federal debt by country. Federal debt represents the accumulated balance of borrowing by the federal government..."
Foreign Holdings of Federal Debt

The Debt Limit: History and Recent Increases

"Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases debt held by the public. Second, debt increases when the federal
government issues debt to certain government accounts, such as the Social Security, Medicare,
and Transportation trust funds, in exchange for their reported surpluses. This increases debt held
by government accounts. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it..."
The Debt Limit: History and Recent Increases

Reducing the Budget Deficit: The President’s Fiscal Commission and Other Initiative
"President Obama created a bipartisan fiscal commission tasked with putting the nation on a
sustainable fiscal path. The commission had two main goals: balancing the budget excluding net
interest payments by FY2015 and examining ways to achieve fiscal sustainability over the long
run. The Fiscal Commission’s final report contained recommendations that would 1) reduce the
deficit by a combined $4 trillion by FY2020; 2) lower the budget deficit to 2.3% of GDP by
FY2015; 3) reduce tax rates and tax expenditures; 4) cap revenue collection at 21% of GDP; 5)
ensure the solvency of Social Security; and 6) reduce the federal debt to 60% of GDP by FY2023
and 40% by FY2035. In order to achieve these savings, the plan includes cuts to both security and
non-security discretionary programs, health care cost containment, additional mandatory savings
through cutting agriculture subsidies and the civil service retirement system, Social Security
reforms, comprehensive tax reform, and budget process changes.

This report discusses why the federal government’s fiscal path is unsustainable and provides an
overview of proposals of selected groups that have published detailed recommendations on how
to return the federal budget to a sustainable course..."

Reaching the Debt Limit: Background and Potential Effects on Government Operation
"The gross federal debt, which represents the federal government’s total outstanding debt, consists of two types of debt: (1) debt held by the public and (2) debt held in government accounts, also known as intragovernmental debt. Federal government borrowing increases for two primary reasons: (1) budget deficits and (2) investments of any federal government account surpluses in Treasury securities, as required by law. Nearly all of this debt is subject to the statutory limit. The federal debt limit currently stands at $14,294 billion.

Treasury has yet to face a situation in which it was unable to pay its obligations as a result of
reaching the debt limit. In the past, the debt limit has always been raised before the debt reached the limit. However, on several occasions Treasury took extraordinary actions to avoid reaching the limit and, as a result, affected the operations of certain programs. If the Secretary of the Treasury determines that the issuance of obligations of the United States may not be made
without exceeding the public debt limit, Treasury can make use of “extraordinary measures.”
Some of these measures require the Treasury Secretary to authorize a debt issuance suspension
period..."

The Debt Limit: History and Recent Increases
"Total debt of the federal government can increase in two ways. First, debt increases when the
government sells debt to the public to finance budget deficits and acquire the financial resources
needed to meet its obligations. This increases debt held by the public. Second, debt increases
when the federal government issues debt to certain government accounts, such as the Social
Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This
increases debt held by government accounts. The sum of debt held by the public and debt held by
government accounts is the total federal debt. Surpluses generally reduce debt held by the public,
while deficits raise it...

The House’s adoption of the conference report on the FY2010 budget resolution (S.Con.Res. 13)
on April 29, 2009, triggered the automatic passage of H.J.Res. 45 to raise the debt limit to
$13.029 trillion. In August 2009, Treasury reportedly said that the debt limit would be reached in
mid-October, although the Treasury later stated that the limit would not be reached until mid or
late December 2009. H.R. 4314, passed by the House on December 16, 2009, and by the Senate
on December 24, raised the debt limit to $12.394 trillion when the President signed the measure
(P.L. 111-123) on December 28. On January 28, the Senate passed an amended version of
H.J.Res. 45, which the House passed on February 4 and the President signed on February 12. This
report, written with the assistance of Joseph McCormack, will be updated as events warrant."