The debt ceiling is a limit set by Congress on the total outstanding amount of money the United States Treasury (within the Executive Branch) is allowed to borrow on behalf of the federal government at any given time. This is a limited authority that has been delegated to the Treasury by Congress, since the Constitution states that only the legislative branch has the “power of the purse.” The debt ceiling is currently about $31.4 trillion after it was raised by $2.5 trillion last year, and the government hit that limit on Thursday, January 20, 2023. That does not mean that we’ve defaulted on our financial obligations (yet), since Treasury Secretary Janet Yellen plans to take “extraordinary measures” to pay our bills, but that can only go on for so long. That means the real fight to avoid default will play out this spring, with the estimated deadline of late May or early June.
The debt ceiling does not, however, constrain the amount the federal government actually spends or the amount it needs to borrow to honor financial commitments. Congress determines spending and taxation levels through government funding bills – Appropriations, Continuing Resolutions, and Reconciliation bills. Yet MAGA Republicans, led by Kevin McCarthy and the extremists in the House Freedom Caucus have made it no secret that they plan to drive the U.S. towards defaulting on our debts in an attempt to extract concessions on spending on critical programs like Social Security and Medicare. This gambit will do nothing but endanger the social safety net, all while putting our national economy at perilous risk.