Why debt ceiling

Senate Minority Leader Mitch McConnell says no member of his party will support a bill lifting or suspending the debt limit — even though he says he wants to see it raised — and Democrats are reluctant to do it on their own. Congress suspended the debt ceiling in for two years, ending July 31, Since then, the U.

Treasury Secretary Janet Yellen has said that those options will run out by about Oct. If the U. Like the rest of us, governments must borrow when they spend more money than they receive.

They do so by issuing bonds, which are effectively IOUs with a promise to repay the money and make regular interest payments. Government debt is the total sum of all this borrowed money. The debt ceiling , which Congress established a century ago, is the maximum amount the government can borrow. Currently, U. Around one-quarter of this money the government actually owes itself. The rest is public debt. Here's what it is and some of the real-world impacts it can have. The debt ceiling is a cap on the amount of money the U.

Every year, Congress passes a budget that includes government spending on infrastructure, programs such as Social Security and salaries for federal workers.

Congress also taxes people to pay for all that spending. But for years, the government has been spending more than it takes in from taxes and other revenue, increasing the federal deficit. The government needs to borrow money to continue paying out what Congress has already OK'd. The debt ceiling puts a limit on how much money the U. If the government cannot borrow money to continue paying for programs, there will be real-world effects for millions of Americans. Here are some of those potential effects, according to Yellen, the White House and the Committee for a Responsible Federal Budget, a nonpartisan organization.

This is an even bigger deal than a government shutdown. A government shutdown occurs when Congress does not approve a new spending bill for the next fiscal year, so new payments, such as paychecks, are stopped.

Republicans insist that if Democrats are to push through such a major spending bill through special budget rules that would not require Republican support, they can also raise the debt ceiling themselves. One hundred years ago, Congress had to approve every case of borrowing money — a major drawback.

For example, in , Congress passed a debt ceiling, which would allow the Treasury Department to borrow money for any approved expense without obtaining permission from Congress, up to a certain limit. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Related Articles. What is the debt ceiling? Next Mortgage rates rise September 29, This is why I have introduced legislation, House Resolution , to kill the debt ceiling once and for all.

The time is now to make this common-sense change. We cannot wait a few more years. It is long past time to permanently retire this sword of Damocles. Boyle represents the 2nd District of Pennsylvania and is a member of the Budget Committee. View the discussion thread. Skip to main content. By Rep.