The debt ceiling was suspended from 2015 to 2017.
$25 trillion
$20
Current
debt ceiling
$19.8 trillion
$15
$10
Projected
debt
$5
National debt
0
2018 estimate
2000
2010
$25 trillion
The debt ceiling was suspended from 2015 to 2017.
$20
Current
debt ceiling:
$19.8 trillion
The economic stimulus after the housing-bubble burst significantly added to the country’s debt.
$15
$10
Projected
debt
$5
National debt
0
2018 estimate
1980
1990
2000
2010
$25 trillion
The debt ceiling was suspended from 2015 to 2017.
$20
Current
debt ceiling:
$19.8 trillion
The economic stimulus after the housing-bubble burst significantly added to the country’s debt.
$15
$10
Medicare and Medicaid became law in 1965 and would make up a large portion of the debt in future years.
Projected
debt
$5
World War II increased U.S. debt in the 1940s.
National debt
0
2018 estimate
1940
1950
1960
1970
1980
1990
2000
2010
President Trump and Democratic leadership have agreed to work on a deal that would eliminate the need for Congress to continually raise the country's debt ceiling — a cap on how much money the United States is allowed to borrow to pay its bills.
The U.S. must borrow money to make up
the difference between spending and revenue.
25 percent of GDP
Spending
20.9%
20
17.8%
15
Revenue
Estimate
10
2000
2005
2010
2015
2020
25 percent of GDP
Estimate
Spending
20.9%
20
The U.S. must borrow
money to make up
the difference between
spending and revenue.
17.8%
Revenue
15
10
2000
2005
2010
2015
2020
The agreement was made in a Sept. 7 meeting with Trump, Sen. Minority Leader Charles E. Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.). Republican leadership was not present and has indicated opposition to the idea. (Meanwhile, the Senate voted to raise the debt ceiling until December, sending it to the House.)
[Trump, Schumer agree to pursue plan to repeal the debt ceiling]
But why do we have a debt ceiling, and why has it stuck around despite the political fight that ensues when it's time to raise it?
The debt ceiling was set up in 1917 so the Treasury could borrow money up to a limit without repeatedly having to go to Congress for permission. (The debt ceiling took its modern form, the one we know today, in 1939.)
Now, it’s seen by many conservatives as a way to rein in federal spending: It takes a significant political fight to be able to go further into debt.
When the U.S.
starts to run out
of money, ...
... Congress
votes to lift the
debt ceiling ...
... which allows
the country to
borrow more
money.
.. until money
runs out again,
restarting the
cycle.
When the U.S.
starts to run out
of money, ...
... Congress
votes to lift the
debt ceiling ...
... which allows the
country to borrow
more money.
These votes to raise the debt ceiling — to allow the United States to continue to borrow money so it does not default on its debt — have long been politicized. Failing to raise the debt ceiling would create a financial disaster: It is likely to become more expensive for the country to borrow money and send the global market into a panic.
That gives both large and small political factions significant power in an elaborate game of chicken. By threatening to let the country default, they try to get concessions from the other side in exchange for their votes. Up to this point, that power has been too enticing for the debt ceiling to be eliminated.
[The Fact Checker’s guide to the debt ceiling]
And it may well continue that way. Given the Republican leadership’s opposition, it’ll be difficult to abolish the debt ceiling, which would require a bipartisan vote. But Trump’s support puts Hill Republicans in a hard spot, having to pick a side in an intraparty conflict.
About this story
Background information from the Congressional Research Service. National debt and debt ceiling data from Office of Management and Budget, the Treasury Department and the Congressional Budget Office. Icons by mikicon, Trident and Blair Adams of the Noun Project.
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