Look up! It’s the debt ceiling — and it’s getting closer once again.
The debt ceiling is the federal government’s legal borrowing limit as set by Congress. As the government nears the debt limit, lawmakers must vote to increase borrowing levels. Otherwise, the federal government would not be able to pay its bills and the United States could default on its obligations.
The ceiling has been raised nearly 100 times since it was established in the early 20th century and has rarely provoked the kind of sharp debate now roiling Washington politics.
As part of his proposal to avert the year-end “fiscal cliff” of automatic tax hikes and spending cuts, President Obama has called on Congress to give him the power to unilaterally increase the debt ceiling unless two-thirds of lawmakers disapprove. That approach was first proposed by Senate Minority Leader Mitch McConnell (R-Ky.) as a temporary measure last year but he never intended that it become permanent.
The White House argues that the change is needed in order to avoid future political fights over the debt ceiling that could once again risk a national default as occurred last year. But many lawmakers are opposed to Obama’s proposal, saying it would deprive Congress of its authority over federal borrowing.
The federal government is expected to reach the current $16.395 trillion debt ceiling in February, according to most analysts. The Bipartisan Policy Center estimates that the limit could have to rise by between $730 billion and $1.25 trillion in 2013 and by between $1.3 trillion and $2.2 trillion in 2014.
By the way, why do we have so much debt? Remember that the debt soared during George W. Bush’s administration because of tax cuts and the cost of wars in Iraq and Afghanistan. It has grown again under Obama by more than $4 trillion, because of decreased tax revenue and higher social spending because of the recession as well as the 2009 economic stimulus program.