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 signed into law in July 2025 extends the debt ceiling by $5 trillion — from $36.1 to $41.1 trillion.
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
The Highway Trust Fund Explained
The funding structure of the Highway Trust Fund requires serious, long-term changes, but how to approach reform remains a topic of debate.
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A strong fiscal outlook is an essential foundation for a growing, thriving economy. Take our quiz to see how much you really know about the federal budget.
What Is Stepped-Up Basis on Capital Gains and How Does It Affect the Federal Budget?
The step-up in basis is a provision in tax law that relates to how assets — such as stocks, bonds, or real estate — are valued and taxed after their owner passes away.