The debt limit—commonly referred to as the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public and to other federal agencies. That amount is set by law and has been increased over the years in order to finance the government’s operations. Currently, there is no statutory limit on the issuance of new federal debt because the Bipartisan Budget Act of 2015 (Public Law 114-74), enacted in November 2015, suspended the debt ceiling through March 15, 2017. On March 16, the limit will be reset to reflect cumulative borrowing through the period of suspension.
Federal Debt and the Statutory Limit, March 2017
Under current law, as of March 16, the Treasury will be at the statutory borrowing limit and will need to use “extraordinary measures” to continue raising cash. Those measures would probably be exhausted sometime this fall.