Raising the roof
Yesterday the federal government hit its debt ceiling, the borrowing limit on the federal budget, which is currently set at a whopping $31.4 trillion.
Although the country has been in this position before, alot, yesterday’s news forced the treasury to spring into action with “extraordinary measures” to prevent the US from defaulting on its debts for what would be the first time in history.
Congress on the clock
The treasury believes the federal government’s coffers could be empty by June, putting a deeply divided Congress on a countdown to get things sorted before then.
Conversations about the national debt have rumbled away since, well, the last time Congress agreed to raise the ceiling two years ago. In fact, Congress has permanently raised, temporarily extended, or revised the definition of the debt ceiling some 78 times since 1960. And, whilst the rate of raises and revisions has slowed in recent years, the amount the ceiling gets raised by each time has of course grown. One such revision in 2021, for example, saw the ceiling rise from $22tn to $28.5tn, before the Biden administration raised the figure another ~$3tn that year to reach the current $31.4tn limit.
With deep division across party lines — Democrats want the ceiling raised quickly, Republicans want it to be tied to promised spending cuts — some fear a repeat of the 2011 debt ceiling crisis, when the US came close to what would have been a catastrophic default.