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The debt limit, also known as the debt ceiling, is the maximum amount of money that the U.S. Treasury can borrow. Increasing the debt limit 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 limit by $2.5 trillion to a total ceiling, or cap, of $31.4 trillion, which is expected to fund government activities through early 2023.
Why is understanding the debt limit 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 limit.
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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.