The debt ceiling, also known as the debt limit, is the maximum amount of money that the U.S. Treasury can borrow. Increasing the debt ceiling allows the Treasury to borrow funds to pay for government obligations that have already been incurred as the result of laws and budgets approved by the President and the Congress.
Legislation enacted in June 2023 suspends the debt limit through January 1, 2025, allowing the government to continue spending on federal programs.
Why is understanding the debt ceiling important and what are the implications for our economy and our fiscal condition? The infographic below explains. For more details, see our analysis on the debt ceiling.
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Further Reading
Debt Ceiling Update: What’s at Stake
If lawmakers do not agree on raising or suspending the debt limit before the extraordinary measures are exhausted, there would be severe consequences.
Budget Basics: Federal Trust Funds
Federal trust funds bear little resemblance to their private-sector counterparts.
10 Largest Budget Functions
Here are the top ten spending categories for the federal budget.