History of the Debt Limit

The Editors | January 24, 12:35 pm
Economic Affairs

Over the past 30 years, Congress has passed and the president signed 37 laws that raised the ceiling on the amount of money the federal government is permitted to borrow. The current limit of $16.39 trillion was set by the August 2011 debt limit law (PL 112-25), which put in place a three-step increase to the debt ceiling while also capping discretionary spending and providing for a budget sequester if further savings targets were not met.

With the federal government again due to reach its borrowing ceiling as early as mid-Febuary, President Obama has said he will not negotiate with Congressional Republicans over the debt limit, which allows the government to pay its bills and avoid defaulting on its obligations. In response, Republicans scaled back their expectations, abandoning their insistence on dollar-for-dollar spending cuts and instead trying to force the Senate to pass a budget.

On Wednesday, the House voted 285-144 to allow the Treasury Department to borrow whatever it needs to pay bills that come due through May 18, without regard to the debt limit. And on that date, the ceiling would be permanently raised to accommodate the additional borrowing that had been undertaken by the Treasury. In effect, the bill grants the Treasury authority to borrow — as long as the money is actually needed — without regard to a specific amount.

The House-passed bill (HR 325) would also suspend salaries of House members or senators if their chamber has not adopted a budget resolution by April 15. Senate Majority Leader Harry Reid, D-Nev., has said that the Senate will clear the bill, and President Barack Obama has said he will not oppose it. Most House Democrats  — 113 of 197 who voted — opposed the bill, and all but 33 House Republicans voted for it.

The graphic above shows the history of the debt limit over the past three decades, along with the growth over that time of both gross debt and marketable debt, which is the value of Treasury securities that are bought and sold by investors. Non-marketable debt includes roughly $4.6 trillion currently held by government trust funds, savings bonds and some issues that are sold to state and local governments.

Interactive by Ted Benson and Sarah Vanderbilt

About the Data

The Treasury Department provides data on the government’s obligations in the Monthly Statement of Public Debt. Figures become available on the fourth business day of each month, and historical data is available in monthly pdf files back to 1869. The history of debt ceiling increases is provided by the Office of Management and Budget annually as a historical table in the president’s budget request.