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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.
On December 16, 2021, President Biden signed legislation increasing the debt ceiling by $2.5 trillion to a total ceiling, or cap, of $31.4 trillion, which is expected to fund government activities through mid-2023.
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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Feel free to share this infographic on Twitter.Tweet: Policymakers have come together repeatedly over the years to avoid default by raising the #DebtLimit — no matter which party is in power.