How does the Debt Ceiling debate impact FA research?
A Call to Action!
President Biden and Speaker McCarthy just announced they have reached an agreement regarding the debt ceiling. What exactly is the debt ceiling? The debt ceiling, also known as a debt limit, is the maximum amount of money that the US government is authorized to borrow to fulfill its financial obligations. When the federal government spends more than it brings in through taxes and other revenue, it must borrow money to pay its bills.
The Constitution requires Congress to authorize borrowing. A debt limit was first created in 1917 to finance mobilization efforts in World War I and further codified in 1939 to allow the Treasury to issue debt up to a certain limit without approval from Congress. The debt ceiling has been raised 78 times since 1960, under both Republican and Democratic Presidents. Raising the debt limit itself does not authorize new spending; it allows the US government to pay for decisions already legislated for in prior budgets. If the debt limit is not raised by June 5, the US government will be unable to pay its bills and will default.