Kavan Choksi / カヴァン・チョクシ Talks About How Often Has the United States Debt Ceiling Been Raised
The debt limit or ceiling is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations. These legal obligations would involve paying for Social Security and Medicare benefits, military salaries, tax refunds, interest on the national debt, and diverse other payments. Kavan Choksi / カヴァン・チョクシ underlines that the debt ceiling does not authorize new spending commitments. Rather, it just allows the government to effectively finance the existing legal obligations that Congresses and presidents have made in the past.
Kavan Choksi / カヴァン・チョクシ briefly discusses how often has the United States debt ceiling been raised
Raising or suspending the debt ceiling becomes a necessity when the government has to borrow more funds to pay off its debts than is federally authorized. For the last several decades, raising the debt ceiling has been a relatively routine procedure for Congress. Congress acted fast whenever the Treasury Department could no longer pay the bills of the government. The Congress has increased the ceiling more than seventy times since the year of 1960, both under Republican and Democratic presidents.
Congress may even opt to suspend the debt ceiling or allow the treasury to supersede the debt limit temporarily instead of raising it by a particular amount. Such a move, however, was rare during the first ninety years of the existence of the debt ceiling. The Congress has suspended the debt limit eight times since 2013, most recently in June 2023. In many ways, a new chapter of debate over the debt ceiling began in 2011, as sparring over spending between President Barack Obama and congressional Republicans led to a protracted deadlock. Eventually the Congress reached a deal to raise the ceiling just two days prior to the date that the treasury estimated it would run out of money. The brinkmanship tiggered among the most volatile weeks for U.S. stocks since the 2008 financial crisis. It was estimated that the delay in reaching a deal increased U.S. borrowing costs by $1.3 billion in just that year.
Kavan Choksi / カヴァン・チョクシ points out that as the polarization in the political landscape of the United States deepened over the last decade, votes to raise the debt ceiling have remained contentious. Congressional budget hawks have been increasingly demanding spending cuts in return for their support. In fact, a debate over the debt ceiling forced the government into a shutdown when it was set to expire in 2013. The issue again came up in 2021. In 2023, the president and senior Republicans in the House of Representatives essentially reached a deal just a few days prior to the Treasury Department said it would run out of money. In case congressional negotiations over the debt ceiling are not resolved before the limit is reached, the treasury may delay default for a few months by making use of a series of temporary actions known as “extraordinary measures.” These measures can include suspending payments to some government employee savings programs, and delaying auctions of securities.
