Glossary

Debt ceiling

A statutory cap on the total amount the Treasury may borrow to pay obligations Congress has already approved.

Also called: debt limit, debt-limit standoff

The debt ceiling, or debt limit, is a cap set by law on how much the federal government can borrow. It does not authorize new spending; it limits the Treasury's ability to borrow to pay bills that Congress and the president have already approved through taxes, spending and deficits.

The limit began in 1917 as a way to give the Treasury flexibility during World War I and has been raised, extended or suspended dozens of times. When the limit is reached, the Treasury uses "extraordinary measures," such as shifting funds among government accounts, to continue paying bills for a few months. If Congress does not act, the government could be unable to pay all its obligations, which could risk a default with serious effects on financial markets.

Debt-limit fights have become a point of leverage, in 2011, 2013 and 2023, when the minority or one chamber demanded spending cuts in exchange for raising it. The 2011 standoff led to a credit-rating downgrade by Standard & Poor's. Supporters of the limit say it forces a debate on borrowing; critics say it risks default for obligations already made and that it should be abolished or tied to the budget process. The 2025 reconciliation law raised it by $5 trillion. See national debt.

Last reviewed November 8, 2026

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Related terms

National debt The total amount the federal government owes from past borrowing, including debt held by the public and by government accounts. Budget deficit The amount by which federal spending exceeds revenue in a given year, financed by borrowing. Government shutdown A lapse in federal appropriations that forces agencies to suspend non-essential operations until funding is restored. Continuing resolution A temporary law that keeps federal agencies funded at existing levels when regular appropriations have not been enacted. Budget reconciliation A fast-track budget process that lets the Senate pass certain tax and spending legislation by simple majority, without a filibuster.