Debt Ceiling
a.k.a. Debt limit
A legal cap on how much debt the US government can have outstanding, which Congress must raise or suspend…
In plain English
A legal cap on how much debt the US government can have outstanding, which Congress must raise or suspend to keep borrowing.
The debt ceiling limits total US federal borrowing. It does not authorise new spending; it allows the Treasury to pay for spending Congress already approved.
Every so often it becomes a political standoff. If it were not raised in time, the US could miss payments, so markets get jittery as deadlines approach. A 2011 standoff led S&P to cut the US credit rating from AAA.
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