WikiNow lets you discover the news you care about, follow the topics that matter to you and share your favourite stories with your friends.

© WikiNow

The United States debt ceiling or debt limit is a legislative limit on the amount of national debt that can be issued by the US Treasury, thus limiting how much money the federal government may borrow. The debt ceiling is an aggregate figure which applies to the gross debt, which includes debt in the hands of the public and in intra-government accounts. Because expenditures are authorized by separate legislation, the debt ceiling does not directly limit government deficits. In effect, it can only restrain the Treasury from paying for expenditures and other financial obligations after the limit has been reached, but which have already been approved and appropriated.

The United States debt ceiling or debt limit is a legislative limit on the amount of national debt that can be issued by the US Treasury, thus limiting how much money the federal government may borrow. The debt ceiling is an aggregate figure which applies to the gross debt, which includes debt in the hands of the public and in intra-government accounts. (About 0.5% of debt is not covered by the ceiling.) Because expenditures are authorized by separate legislation, the debt ceiling does not directly limit government deficits. In effect, it can only restrain the Treasury from paying for expenditures and other financial obligations after the limit has been reached, but which have already been approved (in the budget) and appropriated.

When the debt ceiling is actually reached without an increase in the limit having been enacted, Treasury will need to resort to "extraordinary measures" to temporarily finance government expenditures and obligations until a resolution can be reached. The Treasury has never reached the point of exhausting extraordinary measures, resulting in default, although on some occasions, Congress appeared like it would allow a default to take place. If this situation were to occur, it is unclear whether Treasury would be able to prioritize payments on debt to avoid a default on its bond obligations, but it would at least have to default on some of its non-bond payment obligations. A protracted default could trigger a variety of economic problems including a financial crisis, and a decline in output that would put the country into an economic recession.

Management of the United States public debt is an important part of the macroeconomics of the United States economy and finance system, and the debt ceiling is a constraint on the executive's ability to manage the U.S. economy. There is debate, however, on how the U.S. economy should be managed, and whether a debt ceiling is an appropriate mechanism for restraining government spending.

Trump, Congress reach deal to raise debt ceiling

CNBC's Contessa Brewer reports the White House and Congress have reached a deal to raise the debt ceiling, according to a tweet from President Trump.

The Debt Limit Explained

Blog: Don't Read The News http://www.cgpgrey.com/blog/why-tv-news-is-a-waste-of-human-effort-one-video-is-worth-a-trillion-dollars ...

US Treasury urges Congress to raise debt ceiling

Yahoo Finance's Brian Cheung explains concerns regarding national debt, GDP, debt ceiling and credit rating. Subscribe to Yahoo Finance: ...

Pricing U.S. Debt Ceiling Risks

Jul.16 -- The U.S. government is set to run out of cash in October unless Congress passes an increase in the debt ceiling. Bloomberg Intelligence forecasts the ...

Treasury Department warns the US could hit debt ceiling in early September

Treasury Secretary Steven Mnuchin is calling on Congress to lift debt ceiling before the August recess. CNBC's Ylan Mui reports.

Obama issues US debt ceiling warning

President Obama issues a strong warning to Republicans over the US debt ceiling. President Barack Obama demanded that Congress quickly raise the US ...