The Debt Limit: History and Recent Increases
D. Andrew Austin
Analyst in Economic Policy
October 1, 2015
Congressional Research Service
7-5700
www.crs.gov
RL31967
The Debt Limit: History and Recent Increases
Summary
Congress has always restricted federal debt. The Second Liberty Bond Act of 1917 included an
aggregate limit on federal debt as well as limits on specific debt issues. Through the 1920s and
1930s, Congress altered the form of those restrictions to give the U.S. Treasury more flexibility in
debt management and to allow modernization of federal financing. In 1939, a general limit was
placed on federal debt.
Federal debt accumulates when the government sells debt to the public to finance budget deficits
and to meet federal obligations or when it issues debt to government accounts, such as the Social
Security, Medicare, and Transportation trust funds. Total federal debt is the sum of debt held by
the public and debt held by government accounts. Surpluses reduce debt held by the public, while
deficits raise it.
Congress has modified the debt limit 14 times since 2001. Congress raised the limit in June 2002,
May 2003, November 2004, March 2006, and September 2007. The 2007-2008 fiscal crisis and
subsequent economic slowdown led to sharply higher deficits in recent years, which led to a
series of debt limit increases. The Housing and Economic Recovery Act of 2008 (H.R. 3221),
signed into law (P.L. 110-289) on July 30, 2008, included a debt limit increase. The Emergency
Economic Stabilization Act of 2008 (H.R. 1424), signed into law on October 3 (P.L. 110-343),
raised the debt limit again. The debt limit rose a third time in less than a year to $12,104 billion
with the passage of the American Recovery and Reinvestment Act of 2009 on February 13, 2009
(ARRA; H.R. 1), which was signed into law on February 17, 2009 (P.L. 111-5). Following that
measure, the debt limit was subsequently increased by $290 billion to $12,394 billion (P.L. 111-
123) in a stand-alone debt limit bill on December 28, 2009, and by $1.9 trillion to $14,294 billion
on February 12, 2010 (P.L. 111-139).
The federal debt again reached its limit on May 16, 2011, prompting the Treasury Secretary to
invoke authorities to use extraordinary measures to extend Treasury’s borrowing capacity. On
August 2, 2011, President Obama signed the Budget Control Act of 2011 (BCA; S. 365; P.L. 112-
25), which resolved that debt limit episode. The BCA included provisions aimed at deficit
reduction and allowing the debt limit to rise between $2,100 billion and $2,400 billion in three
stages, the latter two subject to congressional disapproval. Once the BCA was enacted, a
presidential certification triggered a $400 billion increase, and a second $500 billion increase on
September 22, 2011. A third $1.2 trillion increase took place on January 28, 2012.
Federal debt reached its limit on December 31, 2012. Extraordinary measures were again used
until February 4, 2013, when H.R. 325, which suspended the debt limit until May 19, 2013, was
signed into law (P.L. 113-3). When that suspension expired, the debt limit was set at $16,699
billion and extraordinary measures were reemployed. On September 25, Treasury Secretary Lew
notified Congress that the government would exhaust its borrowing capacity around October 17.
On October 16, 2013, Congress passed and the President signed a continuing resolution (H.R.
2775; P.L. 113-46) that included a suspension of the debt limit through February 7, 2014. On
February 11, 2014, the House voted to suspend the debt limit (S. 540; P.L. 113-83) through March
15, 2015. The Senate approved the measure the next day and the President signed it on February
15, 2014. The debt limit was reset on March 16, 2015, at $18.1 trillion. On October 1, 2015,
Secretary Lew stated that extraordinary measures would be exhausted about November 5, 2015,
although a relatively small cash reserve would remain on hand. CRS Report R43389, The Debt
Limit Since 2011, by D. Andrew Austin discusses recent debt limit events in more detail. This
report will be updated as events warrant.
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The Debt Limit: History and Recent Increases
Contents
Introduction ..................................................................................................................................... 1
The Debt Limit and the Treasury..................................................................................................... 1
Possible Consequences of a Binding Debt Limit ...................................................................... 2
U.S. Treasury Debt Management and Extraordinary Measures ................................................ 3
Other Proposed Strategies ......................................................................................................... 3
Why Have a Debt Limit? ................................................................................................................. 4
A Brief History of the Federal Debt Limit ...................................................................................... 5
Origins of the Federal Debt Limit ............................................................................................. 5
World War I and the Liberty Bond Acts .............................................................................. 5
Aggregate Debt Limit Created in 1930s ............................................................................. 6
World War II and After .............................................................................................................. 7
The Debt Ceiling in the Past Decade ............................................................................................... 8
The Debt Limit Issue in 2002 .................................................................................................. 12
Resolving the Debt Limit Issue in 2002............................................................................ 13
The Debt Limit Issue in 2003 .................................................................................................. 13
The Debt Limit Issue in 2004 .................................................................................................. 14
The Debt Limit Issue in 2005, 2006, and 2007 ....................................................................... 15
The Economic Slowdown and Federal Debt ........................................................................... 16
Fiscal Policy Considerations ............................................................................................. 16
Raising the Debt Ceiling in 2008, 2009, and 2010 ........................................................... 17
Raising the Debt Ceiling in 2011 .................................................................................................. 20
Secretary Geithner Invokes Extraordinary Measures in May 2011 ........................................ 20
The Budget Control Act of 2011 ............................................................................................. 22
Debt Limit Increases Under the BCA ............................................................................... 23
The Debt Limit After 2011 ............................................................................................................ 23
Debt Limit Suspended in Early 2012 ...................................................................................... 24
Debt Limit Suspension Expires in May 2013 ......................................................................... 24
Debt Limit Suspended Again as Part of Package to End Government Shutdown in
October 2013 ........................................................................................................................ 24
Debt Limit Reinstated in March 2015 ..................................................................................... 24
Extraordinary Measures Projected to Last Until Early November 2015 .......................... 25
Concluding Comments .................................................................................................................. 25
Figures
Figure 1. Components of Federal Debt as a Percentage of GDP, FY1940-FY2020 ..................... 10
Tables
Table 1. Components of Debt Subject to Limit, FY1996-FY2014 .................................................. 9
Table 2. Modifications of the Debt Limit 1993-2014 ..................................................................... 11
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The Debt Limit: History and Recent Increases
Table A-1. Debt Subject to Limit by Month, September 2001-August 2015 ................................ 27
Table B-1. Major Federal Debt Measures, 1898-1941 .................................................................. 33
Appendixes
Appendix A. Debt Subject to Limit by Month Since September 2001 ......................................... 27
Appendix B. Major Debt Measures Before the Entry of United States into World War II ........... 33
Contacts
Author Contact Information .......................................................................................................... 33
Congressional Research Service
The Debt Limit: History and Recent Increases
Introduction
The statutory debt limit applies to almost all federal debt.1 The limit applies to federal debt held
by the public (that is, debt held outside the federal government itself) and to federal debt held by
the government’s own accounts. Federal trust funds, such as Social Security, Medicare,
Transportation, and Civil Service Retirement accounts, hold most of this internally held debt.2
The government’s surpluses or deficits determine essentially all of the change in debt held by the
public.3 The government’s on-budget fiscal balance, which excludes a U.S. Postal Service net
surplus or deficit and a large Social Security surplus of payroll taxes net of paid benefits, does not
directly affect debt held in government accounts.4 Increases or decreases in debt held by
government accounts result from net financial flows into accounts holding the debt, such as the
Social Security Trust Fund. Legal requirements and government accounting practices also affect
levels of debt held by government accounts.5
Since the late 1950s, the federal government increased its borrowing from the public in all years,
except in FY1969 following imposition of a war surcharge and in the period FY1998-FY2001.6
The persistence of federal budget deficits has required the government to issue more and more
debt to the public.7 The accumulation of Social Security and other trust funds, particularly after
1983 when recommendations of the Greenspan Commission were implemented, led to sustained
growth in government-held debt subject to limit.8 The growth in federal debt held by the public
and in intergovernmental accounts, such as trust funds, has periodically obliged Congress to raise
the debt limit.
Debt limit issues since the passage of the Budget Control Act of 2011 are discussed in more detail
in CRS Report R43389, The Debt Limit Since 2011, by D. Andrew Austin.
The Debt Limit and the Treasury
Standard methods of financing federal activities or meeting government obligations used by the
U.S. Department of the Treasury (Treasury) can be hobbled when federal debt nears its legal
1 Approximately 0.5% of total debt is excluded from debt limit coverage. The Treasury defines “Total Public Debt
Subject to Limit” as “the Total Public Debt Outstanding less Unamortized Discount on Treasury Bills and Zero-
Coupon Treasury Bonds, old debt issued prior to 1917, and old currency called United States Notes, as well as Debt
held by the Federal Financing Bank and Guaranteed Debt.” For details, see http://www.treasurydirect.gov. The debt
limit is codified as 31 U.S.C. §3101.
2 Although there are hundreds of trust funds, the overwhelming majority are very small. The 12 largest trust funds hold
98.8% of the federal debt held in government accounts. See CRS Report R41815, Overview of the Federal Debt, by D.
Andrew Austin.
3 Other means of financing—including cash balance changes, seigniorage, and capitalization of financing accounts used
to fund federal credit programs—have relatively little effect on the changes in debt held by the public.
4 In future years, when some trust funds are projected to pay out more than they take in, funds that the Treasury would
use to redeem those intergovernmental debts must be obtained via higher taxes or lower government spending.
5 Trust fund surpluses by law must be invested in special federal government securities.
6 See Office of Management and Budget, FY2016 Budget, Historical Tables, Table 7.1.
7 The ability to run fiscal deficits gives the federal government useful flexibility in managing its finances, although
large deficits may eventually harm economic performance. See CRS Report RL33657, Running Deficits: Positives and
Pitfalls, by D. Andrew Austin.
8 Report of the National Commission on Social Security Reform, January 1983, available at http://www.ssa.gov/history/
reports/gspan.html. As more of the baby boom generation retires, Social Security benefits have come closer to levels of
Social Security payroll taxes, which has slowed the accumulation of intragovernmental debt.
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limit. The government’s income and outlays vary over the course of the year, producing monthly
surpluses and deficits that affect the level of debt, whether or not the government has a surplus or
deficit for the entire year. Even major government trust fund accounts that usually run annual
surpluses can swing back and forth between deficits and surpluses on a month-to-month basis.
The ability to borrow is central to Treasury cash management systems that handle fluctuations in
federal revenues and outlays. When federal debt has neared the debt limit in the past, limiting the
U.S. Treasury’s borrowing authority, financial management has become more complicated.
Possible Consequences of a Binding Debt Limit
If the U.S. Treasury were precluded from borrowing due to a binding debt limit in times when
federal outlays outpaced revenues, the government would no longer meet all of its legal
obligations in a timely manner.9 If the limit prevents the Treasury from issuing new debt to
manage short-term cash flows or to finance an annual deficit, the government may be unable to
obtain the cash needed to pay its bills or it may be unable to invest the surpluses of designated
government accounts (federal trust funds) in federal debt as generally required by law. In either
case, the Treasury is left in a bind; the law requires that the government’s legal obligations be
paid, but the debt limit may prevent it from issuing the debt that would allow it to do so on time.
Among other consequences, a sustained inability to pay obligations on time could hinder the U.S.
Treasury’s ability to borrow on advantageous terms in the future. The Government Accountability
Office has also concluded that delays in debt limit increases could lead to “serious negative
consequences for the Treasury market and increase borrowing costs.”10 A delay in interest
payments on Treasury securities would trigger a default and risk serious negative repercussions
for economies and financial markets around the world. Default might be avoided in such
situations by delaying other types of federal payments and transfers. A government that delays
payment of an obligation, in effect, borrows from vendors, contractors, beneficiaries, state and
local governments, or employees who are not paid on time. In some cases, delaying payments
incurs interest penalties under some statutes such as the Prompt Payment Act, which directs the
government to pay interest penalties to contractors if it does not pay them by the required
payment date,11 and the Internal Revenue Code, which requires the government to pay interest
penalties if tax refunds are delayed beyond a certain date.12
Several credit ratings agencies and investment banks have expressed concerns about the
consequences to the financial system and the economy if the U.S. Treasury were unable to fund
federal obligations.13 Many economists and financial institutions have stated that if the market
associated Treasury securities with default risks, the effects on global capital markets could be
significant.14
9 See CRS Report R41633, Reaching the Debt Limit: Background and Potential Effects on Government Operations, by
D. Andrew Austin et al.
10 Government Accountability Office, Debt Limit: Delays Create Debt Management Challenges and Increase
Uncertainty in the Treasury Market, GAO-11-203, February 22, 2011.
11 31 U.S.C. §3902. See CRS Report R41230, Legal Protections for Subcontractors on Federal Prime Contracts, by
Kate M. Manuel.
12 26 U.S.C. §6611.
13 Reuters, “S&P To Deeply Cut U.S. Ratings If Debt Payment Missed,” June 29, 2011. For a summary of statements
by the three major ratings agencies, see CRS Report R41932, Treasury Securities and the U.S. Sovereign Credit
Default Swap Market, by D. Andrew Austin and Rena S. Miller.
14 JP Morgan Chase, “The Domino Effect of a US Treasury Technical Default,” U.S. Fixed Income Strategy Group
Brief, April 19, 2011; Fitch Ratings, “Thinking the Unthinkable—What if the Debt Ceiling Was Not Increased and the
(continued...)
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U.S. Treasury Debt Management and Extraordinary Measures
Past Treasury Secretaries, when faced with a nearly binding debt ceiling, have used special
strategies to handle cash and debt management responsibilities. Actions taken in the past include
suspending sales of nonmarketable debt, postponing or downsizing marketable debt auctions, and
withholding receipts that would be transferred to certain government trust funds. Congress has
authorized the Treasury Secretary to invoke a “debt issuance suspension period” to use some of
these strategies using the Civil Service Retirement Fund and the Thrift Savings Fund, along with
the authority to make those funds whole after an easing of the debt constraint.15
Some U.S. Treasury responses to the credit crunch that began in mid-2007 created balance sheet
items that expanded options available to the Treasury Secretary, although such options would now
have minor effects on delaying when federal debt would reach its legal limit. The U.S. Treasury
began selling off certain mortgage-backed securities (MBSs) acquired in late 2008.16 The pace of
those sales was targeted at $10 billion per month in order to minimize any market disruptions in
the mortgage securities market. As of March 2012, however, that Treasury portfolio of MBSs has
been eliminated.17 Proceeds of other potential asset sales are unlikely to allow the U.S. Treasury
to maintain smooth debt management operations indefinitely in the face of a continuing
imbalance between federal revenues and outlays without an increase in the debt limit. U.S.
Treasury contends that other types of asset sales are unlikely to provide a prudent or practical
method of easing debt limit constraints.18
Other Proposed Strategies
Some have suggested that the Fourteenth Amendment (Section 4), which states that “(t)he validity
of the public debt of the United States ... shall not be questioned,” could provide the President
with authority to ignore the statutory debt limit. President Obama has rejected such claims, as
(...continued)
US Defaulted?” June 8, 2011.
15 For details, see out-of-print CRS Report 95-1109, Authority to Tap Trust Funds and Establish Payment Priorities if
the Debt Limit is Not Increased, by Thomas J. Nicola and Morton Rosenberg. Available upon request from the authors.
5 U.S.C. §8348(b) defines a debt issuance suspension period as “any period for which the Secretary of the Treasury
determines for purposes of this subsection that the issuance of obligations of the United States may not be made
without exceeding the public debt limit.” After a debt issuance suspension period ends, the Treasury Secretary must
report to Congress as soon as possible regarding fund balances and any extraordinary actions taken. For details, see 5
U.S.C. §8348(j,k).
16 U.S. Treasury, “Treasury to Begin Orderly Wind Down of Its $142 Billion Mortgage-Backed Securities Portfolio,”
press release, March 21, 2011, available at http://www.treasury.gov/press-center/press-releases/Pages/tg1111.aspx.
17 See the monthly portfolio statements available at http://www.treasury.gov/resource-center/data-chart-center/Pages/
mbs-purchase-program.aspx. Also see Mary J. Miller, “MBS Wind Down Update—Taxpayers Have Now Recovered
More than Half of Treasury’s Original Investment,” U.S. Treasury, Treasury Notes, May 2, 2011, available at
http://www.treasury.gov/connect/blog/Pages/MBS-Wind-Down-Update-Taxpayers-Have-Now-Recovered-More-than-
Half-of-Treasurys-Original-Investment.aspx.
18 Mary Miller, Assistant Secretary of the Treasury for Financial Markets, “Federal Asset Sales Cannot Avoid Need for
Increase in Debt Limit,” Treasury Notes blog, May 6, 2011, available at http://www.treasury.gov/connect/blog/Pages/
Federal-Asset-Sales-Cannot-Avoid-Need-for-Increase-in-Debt-Limit.aspx. These points were reiterated in the
Appendix to the Treasury Secretary’s December 26, 2012, letter to Majority Leader Harry Reid; available at
http://www.treasury.gov/connect/blog/Documents/Sec%20Geithner%20LETTER%2012-26-
2012%20Debt%20Limit.pdf.
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have most legal analysts.19 More imaginative strategies to avoid debt ceiling constraints have also
been proposed.
Why Have a Debt Limit?
The debt limit can hinder the Treasury’s ability to manage the federal government’s finances, as
noted above. In extreme cases, when the federal debt is very near its statutory limit, the Treasury
must take unusual and extraordinary measures to meet federal obligations.20 While the debt limit
has never caused the federal government to default on its obligations, it has at times caused great
inconvenience and has added uncertainty to Treasury operations.
The debt limit also provides Congress with the strings to control the federal purse, allowing
Congress to assert its constitutional prerogatives to control spending.21 The debt limit also
imposes a form of fiscal accountability that compels Congress and the President to take visible
action to allow further federal borrowing when the federal government spends more than it
collects in revenues. In the words of one author, the debt limit “expresses a national devotion to
the idea of thrift and to economical management of the fiscal affairs of the government.”22 On the
other hand, some budget experts have advocated elimination of the debt limit, arguing that other
controls provided by the modern congressional budget process established in 1974 have
superseded the debt limit, and that the limit does little to alter spending and revenue policies that
determine the size of the federal deficit.23 The Obama Administration has proposed allowing
increases in the debt limit subject to congressional disapproval.24
While the budget process provides Congress with one means of controlling federal spending, the
debt limit may provide a different sort of leverage that is not redundant. Congress ordinarily
delegates work to its committees. The Committees on Appropriations have special responsibilities
regarding discretionary spending, and authorizing committees are generally responsible for
mandatory program spending decisions, while Committees on the Budget are tasked with drafting
an overall budgetary framework that specifies aggregate levels for federal spending and taxation.
While those committees often incorporate views of other committees and Members, measures
involving the debt limit often provide individual Members not belonging to those committees
with a separate instrument to influence federal fiscal policy.
19 Adam Liptak, “The 14th Amendment, the Debt Ceiling and a Way Out,” New York Times, January 24, 2011;
Remarks by the President at University of Maryland Town Hall, available at http://www.whitehouse.gov/the-press-
office/2011/07/22/remarks-president-university-maryland-town-hall. For a legal analysis, see CRS congressional
distribution memorandum, Whether the Public Debt Clause Authorizes the President to Borrow Money in Excess of the
Debt Ceiling, December 21, 2012, by Kenneth R. Thomas.
20 U.S. General Accounting Office (GAO), Analysis of Actions Taken during the 2003 Debt Issuance Suspension
Period, GAO-04-526, May 2004, available at http://www.gao.gov/new.items/d04526.pdf.
21 For a vigorous assertion of the utility of the debt ceiling, see Anita S. Drishnakumar, “In Defense of the Debt Limit
Statute,” Harvard Journal on Legislation, vol. 42, 2005, pp. 135-185.
22 Marshall A. Robinson, The National Debt Ceiling: An Experiment in Fiscal Policy, Washington, DC: The Brookings
Institution, 1959, p. 5.
23 Bruce Bartlett, “Why Congress Must Now Abolish its Debt Limit,” Financial Times, October 22, 2009, p. 11; Brian
C. Roseboro, Assistant Secretary for Financial Markets, U.S. Treasury, “Remarks to the Bond Market Association’s
Inflation-Linked Securities Conference,” New York, NY, available at http://web.archive.org/web/20080709100455/
http://www.treas.gov/press/releases/js506.htm.
24 Treasury Secretary Geithner outlined these proposals on December 2, 2012. See Jenni LeCompte, “Taking the Threat
of Default Out of the Debt Limit,” Treasury Notes blog, December 5, 2012, available at http://www.treasury.gov/
connect/blog/Pages/mcconnell-provision.aspx.
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A Brief History of the Federal Debt Limit
Origins of the Federal Debt Limit
Congress has always placed restrictions on federal debt. Limitations on federal debt have helped
Congress assert its constitutional powers of the purse, of taxation, and of the initiation of war.
Between World War I and World War II the form of statutory restrictions on federal debt evolved
into an aggregate limit that applied to nearly all federal debt outstanding.
Before World War I, Congress often authorized borrowing for specified purposes, such as the
construction of the Panama Canal.25 Congress also often specified which types of financial
instruments Treasury could employ, and specified or limited interest rates, maturities, and details
of when bonds could be redeemed. In other cases, especially in time of war, Congress provided
the Treasury with discretion, subject to broad limits, to choose debt instruments.26 Some
opponents raised concerns that granting the Treasury Secretary authority to issue debt could affect
monetary policies, which might tighten credit conditions. Proponents contended that federal
borrowing would not disrupt settlements on such monetary issues reached in 1878 and 1890.
Such concerns became moot after the establishment of the Federal Reserve System in 1913.
For example, the War Revenue Act of 1898 allowed Treasury to use certificates of indebtedness,
which had maturities of a year or less, and were used for short-term borrowing and cash
management, as well as long-term bonds.27 For example, the 1898 War Revenue Act (30 Stat.
448-470) that funded Spanish-American War costs granted the Treasury Secretary the authority to
have $100 million outstanding in certificates of indebtedness with maturities under a year, which
were mainly sold to large investors, banks, and other financial institutions. The act also allowed
the Treasury to issue $400 million in longer-term notes and bonds, which were made available to
public subscription, allowing smaller investors to participate. Proponents of the act, however,
made clear their intention to allow the Treasury Secretary substantial administrative leeway
within those limits.28
World War I and the Liberty Bond Acts
Over time, the leeway granted the Treasury Secretary tended to expand. For example, the Second
Liberty Bond Act of 1917, which helped finance the United States’ entry into World War I,
dropped certain limits on the maturity and redemption of bonds.29 The act also incorporated
unused borrowing capacity authorized by the First Liberty Bond Act (40 Stat 35; P.L. 65-3) and
25 Spooner Act of June 28, 1902 (32 Stat 481; P.L. 57-183).
26 Marshall A. Robinson, The National Debt Ceiling: An Experiment in Fiscal Policy, (Washington, DC: Brookings
Institution, 1959), pp.1-6.
27 The War Revenue Act was enacted June 13, 1898. Much of the legislative text of the act’s public borrowing Sections
(§32, 33) were drawn from the acts of June 30, 1864, ch. 172, §1 (13 Stats. 218) and of March 3, 1865, ch. 77 (13 Stats.
469).
28 See House debate, Congressional Record, vol. 31, part 6 (June 9, 1898), pp. 5713-5728; and Senate debate on June
10, 1898, pp. 5732-5749.
29 P.L. 65-43, 40 Stat. 288, enacted September 24, 1917. See H. J. Cooke and M. Katzen, “The Public Debt Limit,”
Journal of Finance, vol. 9, no. 3 (September 1954), pp. 298-303. The Second Liberty Bond Act allowed purchases of
government debt of allied (i.e., Entente) countries, which would have complicated limits on the final redemption of
federal bonds issued to fund their purchase. Some federal bonds issued in the wake of the Panic of 1893 did not have
maturity limits.
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other previous borrowing acts.30 Separate limits for previous debt issues, however, were retained
in the text of that act—an overall aggregated debt limit evolved later. Features of debt authorized
by previous acts, such as the broad tax exemption for First Liberty Bond Act securities, remained
intact.
Subsequent borrowing measures were drafted as amendments to Second Liberty Bond Act until
1982.31 Setting debt policy by amendments to the Second Liberty Bond Act of 1917 rather than
through original statutes reflected changes in legislative drafting practices at that time.32
In the 1920s, Congress provided Treasury Secretary Andrew Mellon with additional leeway in
order to replace expensive older federal debt with cheaper new issues. Congress allowed Treasury
to issue notes, a financial instrument issued extensively in the Civil War and rarely thereafter, and
limited the amount of notes outstanding, rather than the sum of issuances, which gave greater
Treasury flexibility to roll over debt. Savings certificates designed for small investors were also
reintroduced.33
Aggregate Debt Limit Created in 1930s
In the 1930s, Congress moved towards aggregate constraints on federal borrowing that allowed
the Treasury greater ability to respond to changing conditions and more flexibility in financial
management. In 1930, Treasury Secretary Mellon, noting that Liberty bonds would become ready
for refinancing in the next few years, argued that “orderly and economical management of the
public debt requires that the Treasury Department should have complete freedom in determining
the character of securities to be issued and should not be confronted with any arbitrary
limitation.”34 Congress granted the U.S. Treasury greater flexibility in issuing bonds in 1931.35
In 1935, Treasury Secretary Henry Morgenthau called for replacing a limit on bond issuance with
a more flexible limit on the amount of outstanding bonds. This change underlined Treasury
bonds’ role as a means of managing federal finances rather than securities tied to specific projects
or wars.36 Following that request, Congress then established a $20 billion limit on shorter-term
debt and a $25 billion limit on outstanding bonds.
30 The other acts were the Panama Canal measure (Spooner Act; P.L. 57-183), the Payne-Aldrich Tariff Act of August
5, 1909 (36 Stat 11; P.L. 61-5); and two emergency bond measures passed in March 1917 (39 Stat 1002 and 39 Stat
1021).
31 In 1982, the debt limit was codified into 31 U.S.C. §3101 by P.L. 97-258. Subsequent changes in the debt limit have
been drafted as amendments to 31 U.S.C. §3101.
32 Middleton Beaman, a former Law Librarian of the Library of Congress, Columbia Law School professor, and
advocate for the professionalization of drafting legislation, returned to Washington in 1916 to assist the House Ways
and Means Committee, which originated the Liberty Bond acts and other borrowing and revenue measures. This
arrangement was formalized in 1918, when the Legislative Drafting Service, the predecessor office of the modern
Office of Legislative Counsel, was established. Donald R. Kennon and Rebecca M. Rodgers, The Committee on Ways
and Means a Bicentennial History 1789-1989, H. Doc. 100-244, p. 258. See also, Middleton Beaman, “Bill Drafting,”
Law Library Journal, vol. 7 (1914), pp. 64-71. For a critical view of legislative drafting in prior decades, see James
Bryce, The American Commonwealth, 3rd revised ed., vol. 1 (New York: Macmillan, 1920), chapter XV on
“Congressional Legislation.”
33 Revenue Act of November 23, 1921 (42 Stat 227; P.L.67-98). See also Paul Studenski and Herman E. Kroos,
Financial History of the United States, 2nd ed. (New York: McGraw-Hill, 1963), p. 316.
34 Annual Report of the Secretary of the Treasury for 1930, p. 39. Available at http://fraser.stlouisfed.org/docs/
publications/treasar/AR_TREASURY_1930.pdf.
35 For details, see Kenneth D. Garbade, Birth of a Market, (MIT Press: Cambridge, MA, 2012), pp. 314-317.
36 Ibid.
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In March 1939, President Franklin Roosevelt and Secretary Morgenthau asked Congress to
eliminate separate limits on bonds and on other types of debt.37 The House approved the measure
(H.R. 5748) on March 23, 1939, and the Senate passed an amended version on June 1. On July
14, the amendment was withdrawn in the Senate after the House had disagreed, thus clearing the
way for President Franklin Roosevelt’s signature. When enacted on July 20, the law (P.L. 76-201)
created the first aggregate limit ($45 billion) covering nearly all public debt.38 Combining a $30
billion limit on bonds with a $15 billion limit on shorter-term debt, while retaining the $45 billion
total limit in effect, enabled Treasury to roll over maturing notes into longer-term bonds. This
measure gave the Treasury freer rein to manage the federal debt as it saw fit. Thus, the Treasury
could issue debt instruments with maturities that would reduce interest costs and minimize
financial risks stemming from future interest rate changes.39 While a separate $4 billion limit for
“National Defense” series securities was introduced in 1940, legislation in 1941 folded that
borrowing authority back under an increased aggregate limit of $65 billion.40
Although the Treasury was delegated greater independence of action on the eve of the United
States’ entry into World War II, the debt limit at the time was much closer to total federal debt
than it had been at the end of World War I. For example, the 1919 Victory Liberty Bond Act (P.L.
65-328) raised the maximum allowable federal debt to $43 billion, far above the $25.5 billion in
total federal debt at the end of FY1919.41 By contrast, the debt limit in 1939 was $45 billion, only
about 10% above the $40.4 billion total federal debt of that time.42
World War II and After
The debt ceiling was raised to accommodate accumulating costs for World War II in each year
from 1941 until 1945, when it was set at $300 billion.43 After World War II ended, the debt limit
was reduced to $275 billion. Because the Korean War was mostly financed a pay-as-you-go basis
rather than by increased debt, the limit remained at $275 billion until 1954. The Eisenhower
Administration had requested an increase in the 1953 State of the Union address, but Congress
declined to raise the limit until it approved a temporary increase in August 1954.44 Two more
temporary increases followed, but the limit reverted to $275 billion in July 1957. Congress
37 New York Times, “President Urges Ending of Limit on Bonded Debt; Asks Congress to Facilitate Borrowing by
Eliminating $30,000,000,000, ‘Ceiling’ Stands By Total Debt Top $45 Billion All Right for Now, Message Says—
Yielding to Economizers is Seen,” March 21, 1939.
38 See also Senate debate, Congressional Record, vol. 84, part 6 (June 1, 1939), pp. 6480, 6497-6501; part 9 (July 14,
1939), pp. 9141, 9164. Senator Norris offered an amendment to allow the Tennessee Valley Authority (TVA) to use
bonds to consummate purchases of some power plants. Once a separate TVA measure was agreed to, the amendment to
the debt limit measure (H.R. 5748) was withdrawn the same day.
39 This limit did not apply to certain previous public debt issues that comprised a very minor portion of the federal debt.
40 Revenue Act of June 25, 1940 (54 Stat 516; P.L. 76-656) and Revenue Act of February 19, 1941 (55 Stat 7).
41U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970, H. Doc. 93-78
(Washington: GPO, 1975), Series Y 493-504.
42 For a list of changes in the debt limit between September 1917 and 1941, see U.S. Treasury, Statistical Appendix
1980, Table 32 entitled “Debt limitation under the Second Liberty Bond Act, as amended, beginning 1917.”
43 Public Debt Acts of 1941 (P.L. 77-7), 1942 (P.L. 77-510), 1943 (78-34), 1944 (P.L. 78-333), and 1945 (P.L. 79-48).
44 President Dwight D. Eisenhower, “Annual Message to the Congress on the State of the Union,” February 2, 1953,
http://www.eisenhower.archives.gov/all_about_ike/speeches/1953_state_of_the_union.pdf. Joseph J. Thorndike, “Can
Debt Ceiling Debates Be Useful? History Says Maybe,” Tax Analysts Blog, August 27, 2013.
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declined to raise the limit until the following February, in part to “compel more economy of
efficiency, better management of money and manpower in the defense program.”45
In March 1962, the debt limit reached $300 billion, its level at the end of World War II. Since
then, Congress has enacted 78 separate measures that have altered the limit on federal debt.46
Most debt limit changes were relatively small compared to changes adopted in wartime or during
the Great Depression. Some recent increases in the debt limit, however, were large in dollar
terms. For instance, the debt limit was increased by $1.9 trillion (P.L. 111-139) in February 2010.
The Debt Ceiling in the Past Decade
During the four years (FY1998-FY2001) the government ran surpluses, federal debt held by
intergovernmental accounts grew by $855 billion and debt held by the public fell by almost $450
billion. Since FY2001, however, debt held by the public has grown due to persistent and
substantial budget deficits. Debt held in government accounts also has grown, in large part
because Social Security payroll taxes have exceeded payments of beneficiaries. Table 1 shows
components of debt in current dollars and as percentages of gross domestic product (GDP) since
FY1996.47 Figure 1 shows the components of federal debt as shares of gross domestic product
(GDP) from FY1940 through FY2014, along with Administration projections through FY2019.48
Table 2 provides information on debt limit increases from 1993 to 2014.49
45 Rep. George H. Mahon, “Battle of the Budget in Defense Program,” Extension of Remarks, Congressional Record,
vol. 103 (August 30, 1957), pp. H16805-H16809.
46 U.S. Office of Management and Budget, FY2010 Budget of the U.S. Government: Historical Tables, Table 7-3.
Increases in the debt limited potentially enabled by the Budget Control Act of 2011 are counted as one alteration. It is
difficult to classify all of those modifications unambiguously as increases. For example, some debt limit measures
extended temporary debt limit increases that would have lapsed.
47 Until 2001, Treasury publications did not divide debt subject to limit by that held by the public and that held by
government accounts Table 1 uses CRS calculations that approximate levels of debt subject to limit held in these two
categories for fiscal years prior to 2001.
48 The data show components of debt compared to the size of the economy. This avoids possible distortions resulting
from changing price levels over time and includes changes in per capita incomes. This percentage increases when debt
grows faster than GDP and falls when it grows more slowly than GDP.
49 For a list of debt limit votes, see CRS Report R41814, Votes on Measures to Adjust the Statutory Debt Limit, 1978 to
Present, by Justin Murray. For a discussion of earlier debt limit increases, see out-of-print CRS Report 98-805 E,
Public Debt Limit Legislation: A Brief History and Controversies in the 1980s and 1990s, by Philip D. Winters.
Congressional Research Service
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The Debt Limit: History and Recent Increases
Table 1. Components of Debt Subject to Limit, FY1996-FY2014
In billions of current dollars and as percentage of GDP
Debt Subject to Limit
End of Fiscal
Debt
Total
Intragovernmental
Held by the Public
Year
Limit
$ Billion
% of GDP $ Billion
% of GDP
$ Billion
% of GDP
1996
$5,500
$5,137.2
63.0%
$1,432.4
17.6%
$3,704.8
45.4%
1997
5,950
5,327.6
61.3%
1,581.9
18.2%
3,745.8
43.1%
1998
5,950
5,439.4
59.5%
1,742.1
19.0%
3,697.4
40.4%
1999
5,950
5,567.7
57.3%
1,958.2
20.1%
3,609.5
37.1%
2000
5,950
5,591.6
54.0%
2,203.9
21.3%
3,387.7
32.7%
2001
5,950
5,732.8
53.9%
2,436.5
22.9%
3,296.3
31.0%
2002
6,400
6,161.4
55.8%
2,644.2
24.0%
3,517.2
31.9%
2003
7,384
6,737.6
57.9%
2,846.7
24.5%
3,890.8
33.5%
2004
7,384
7,333.4
59.3%
3,056.6
24.7%
4,276.8
34.6%
2005
8,184
7,871.0
59.6%
3,301.0
25.0%
4,570.1
34.6%
2006
8,965
8,420.3
60.5%
3,610.4
26.0%
4,809.8
34.6%
2007
9,815
8,921.3
61.2%
3,903.7
26.8%
5,017.6
34.4%
2008
10,615
9,960.0
67.1%
4,180.0
28.2%
5,780.3
38.9%
2009
12,104
11,853.4
82.4%
4,325.1
30.1%
7,528.3
52.3%
2010
14,294
13,510.8
89.7%
4,509.6
29.9%
$9,001.2
59.8%
2011
15,194
14,746.6
94.6%
4,639.4
29.8%
10,107.1
64.8%
2012
16,394
16,027.0
98.5%
4,776.4
29.4%
11,250.6
69.2%
2013
16,699
16,699.4
99.0%
4,740.6
28.1%
11,958.8
70.9%
2014
*
17,781.1
104.1%
5,012.2
29.3%
12,768.9
74.8%
2015Q2
18,113
18,113.0
100.6%
5,037.3
28.0%
13,075.7
72.6%
Change from
start FY1998 – end FY2001
$405.2
$854.6
-$449.5
Change from
start FY2002 – end FY2007
3,188.5
1,467.2
1,721.3
Change from
start FY2008 – end FY2011
5,825.2
735.7
5,089.5
Change from
start FY2012 – end FY2014
3,034.6
372.8
2,661.7
Source: U.S. Department of the Treasury, Financial Management Service, Treasury Bulletin; Bureau of the Public
Debt, Monthly Statement of Public Debt, various issues; Bureau of Economic Analysis; and CRS calculations. Blue
Chip consensus estimates used to compute 2015Q2 GDP.
Notes: Amounts held by government accounts and held by the public for FY1996-FY2000 are approximated. In
2001, the Treasury publications began distinguishing holders of debt subject to limit. The numbers in the table
showing this breakdown for FY1996 through FY2000 were calculated by subtracting debts of the Federal
Financing Bank, an arm of the Treasury whose debt is subject to a separate limit, from intragovernmental debt.
This calculation overestimates debt by bil ions of dol ars because estimates of unamortized discount are
unavailable. This adjusted amount was then subtracted from total debt subject to limit for an approximate
measure of debt held by the public subject to limit. Because intragovernmental debt is overestimated, debt held
by the public is underestimated. Totals may not sum due to rounding.
* At the end of FY2014 the debt limit was suspended. It was reinstated on March 16, 2015, at $18,113 bil ion.
Congressional Research Service
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Figure 1. Components of Federal Debt as a Percentage of GDP, FY1940-FY2020
Source: CRS calculations based on data and projections from OMB FY2016 budget submission.
Notes: FY2015 values are estimated; FY2016-FY2020 values are OMB projections reflecting Administration assumptions and proposals.
CRS-10
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Table 2. Modifications of the Debt Limit 1993-2014
Change from
New Debt Limit
Previous Limit
Date
Public Law (P.L.) Number
($ billion)
($ billion)
April 6, 1993
P.L. 103-12
$4,370a
$225
August 10, 1993
P.L. 103-66
4,900
530
February 8, 1996
P.L. 104-103
b
—
March 12, 1996
P.L. 104-115
c
—
March 29, 1996
P.L. 104-121
5,500
600d
August 5, 1997
P.L. 105-33
5,950
450
June 28, 2002
P.L. 107-199
6,400
450
May 27, 2003
P.L. 108-24
7,384
984
November 19, 2004
P.L. 108-415
8,184
800
March 20, 2006
P.L. 109-182
8,965
781
September 29, 2007
P.L. 110-91
9,815
850
July 30, 2008
P.L. 110-289
10,615
800
October 3, 2008
P.L. 110-343
11,315
700
February 17, 2009
P.L. 111-5
12,104
789
December 28, 2009
P.L. 111-123
12,394
290
February 12, 2010
P.L. 111-139
14,294
1,900
August 2, 2011
P.L. 112-25
16,394e
2,100e
February 4, 2013
P.L. 113-3
16,699f
305f
October 17, 2013
P.L. 113-46
17,212g
213g
February 15, 2014
P.L. 113-83
18,113h
901h
Sources: CRS, compiled using the Legislative Information System, available at http://www.congress.gov; OMB.
a. Increased the debt limit temporarily through September 30, 1993.
b. Temporarily exempted from limit obligations in an amount equal to the monthly insurance benefits payable
under Title II of the Social Security Act in March 1996, the exemption to expire on the earlier of an
increase in the limit or March 15, 1996.
c. Temporarily exempted from limit (a) obligations in an amount equal to the monthly insurance benefits
payable under Title II of the Social Security Act in March 1996 and (b) certain obligations issued to trust
funds and other federal government accounts, both exemptions to expire on the earlier of an increase in
the limit or March 30, 1996.
d. Difference from debt limit set on August 10, 1993.
e. See discussion in first section of this report. BCA-related increases, divided into three steps ($400 bil ion on
August 2, 2011; $500 bil ion on September 22, 2011; and $1,200 bil ion on January 28, 2012) totaled $2,100
bil ion.
f.
Debt limit suspended until May 19, 2013. Debt limit reset at $16,699 bil ion after suspension expired.
g. Debt limit suspended until February 7, 2014. Debt limit reset at $17,212 bil ion after suspension expired.
h. Debt limit suspended until March 16, 2015, when the debt limit was reset to $18,113 bil ion.
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The Debt Limit: History and Recent Increases
Federal debt held by government accounts has grown steadily since 1982, in part due to increases
in Social Security taxes passed following recommendations of the 1983 Greenspan Commission,
and reflecting the transition of the baby boom generation into its peak earnings years.50
Debt held by the public, which changes in response to total surpluses or deficits, grew as a share
of GDP through the mid-1990s. After FY1992, deficits shrank, and from FY1998 through
FY2001 the federal government ran surpluses.51 Those surpluses, along with rapid GDP growth,
reduced debt held by the public as a percentage of GDP. When large deficits returned and GDP
growth slowed in the early 2000s, debt held by the public as a share of GDP again increased.
The Debt Limit Issue in 2002
Accumulating debt in government accounts produced most of the pressure on the debt limit that
occurred early in 2002. As deficits reemerged in FY2002, increases in debt held by the public
added to the pressure on the debt limit in the spring of 2002. During the four fiscal years with
surpluses (FY1998-FY2001), the increases in federally held debt and decreases in debt held by
the public produced a net increase of $405 billion in total debt subject to limit. At the beginning
of FY2002 (October 1, 2001), debt subject to limit was within $217 billion of the existing $5,950
billion debt limit.52 Between then and the end of May 2002, debt subject to limit increased by
another $217 billion, divided between a $117 billion increase in debt held by government
accounts and a $100 billion increase in debt held by the public, putting the debt close to the
$5,950 billion limit.
In the fall of 2001, the Administration recognized that a deteriorating budget outlook and
continued growth in debt held by government accounts were likely to lead to the debt limit soon
being reached. In early December 2001, it asked Congress to raise the debt limit by $750 billion
to $6,700 billion. As the debt moved closer to and reached the debt limit over the first six months
of FY2002, the Administration asked Congress repeatedly to increase the debt limit, warning of
adverse financial consequences were the limit not raised.
On April 4, 2002, the Treasury held debt below the limit by invoking its legislatively mandated
authority to suspend reinvestment of government securities in the G-Fund of the federal
employees’ Thrift Savings Plan (TSP). This allowed the Treasury to issue new debt and meet the
government’s obligations. On April 15, debt subject to limit stood at $5,949,975 million, just $25
million below the limit. Once April 15 tax revenues flowed in, the Treasury “made whole” the G-
Fund by restoring all of the debt that had not been issued to the TSP over this period and crediting
the fund with interest it would have earned on that debt.53 By the end of April, debt subject to
limit had fallen back $35 billion below the limit.
50 The Social Security Amendments of 1983 (H.R. 1900; P.L. 98-21), enacted April 20, 1983, introduced those
changes. For details, see a summary available on the Social Security Administration’s History website, at
http://www.ssa.gov/history/1983amend2.html.
51Federal on-budget receipts and outlays nearly matched in FY1999, and the on-budget surplus in FY2000 was 0.9% of
GDP. Prior to FY1999, the federal government last had an on-budget surplus in FY1960. Social Security receipts in
excess of benefits make up most of the off-budget surplus, which has been positive since FY1985.
52 The debt limit was raised from $5,500 billion to $5,950 billion on August 5, 1997, as part of the Balanced Budget
Act of 1997 (P.L. 105-33, 111 Stat. 251).
53 For a comprehensive discussion of the Treasury’s previous uses of its short-term ability to avoid breaching the debt
limit, see U.S. General Accounting Office, Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,
GAO/AIMD-96-130, August 1996.
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The Debt Limit: History and Recent Increases
Resolving the Debt Limit Issue in 2002
By the middle of May 2002, debt subject to limit had again risen to within $15 million of the
statutory limit. At the FY2002 average spending rate, $15 million equaled about five minutes of
federal outlays. The Treasury, for the second time in 2002, used its statutory authority to avoid a
default. The Treasury’s financing problems, however, would persist without an increase in the
debt limit. On May 14, the Treasury asked Congress to raise the debt limit or enact other statutory
changes allowing the Treasury to issue new debt. A Treasury news release stated “absent
extraordinary actions, the government will exceed the statutory debt ceiling no later than May
16,” and that
a “debt issuance suspension period” will begin no later than May 16 [2002].... [This]
allows the Treasury to suspend or redeem investments in two trust funds, which will
provide flexibility to fund the operations of the government during this period.54
The Treasury reduced federal debt held by these government accounts by replacing it with non-
interest-bearing, non-debt instruments, which enabled it to issue new debt to meet the
government’s obligations. The Treasury claimed these extraordinary actions would suffice, at the
latest, through June 28, 2002. Without a debt limit increase by that date, the Treasury indicated it
would need to take other actions to avoid breaching the ceiling. By June 21, the Treasury had
postponed a regular securities auction, but took no other actions. With large payments and other
obligations due at the end of June and at the beginning of July, the Treasury stated it would soon
exhaust all options to issue debt and fulfill government obligations, putting the government on the
verge of a default.
During May and June 2002, Congress took steps to increase the debt limit. The FY2002
supplemental appropriations bill (H.R. 4775) passed by the House on May 24 included, after
extended debate, language allowing any eventual House-Senate conference on the legislation to
increase the debt limit. However, the Senate’s supplemental appropriations bill (S. 2551;
incorporated as an amendment to H.R. 4775, June 3, 2002) omitted debt-limit-increasing
language. The Senate leadership expressed strong reluctance to include a debt limit increase in the
supplemental appropriation bill. Instead, on June 11, the Senate adopted a bill (S. 2578), without
debate, to raise the debt limit by $450 billion to $6,400 billion. At that time, a $450 billion debt
limit increase was thought to provide enough borrowing authority for government operations
through the rest of calendar year 2002, if not through the summer of 2003. With the possibility of
default looming over it, the House passed the $450 billion debt limit increase by a single vote on
June 27. The President signed the bill into law on June 28 (P.L. 107-199, 116 Stat. 734), ending
the 2002 debt limit crisis.55
The Debt Limit Issue in 2003
On Christmas Eve, 2002, Kenneth Dam, Deputy Secretary of the Treasury, sent a letter to
Congress requesting an unspecified increase in the debt limit by late February 2003, signaling
that the $6,400 billion debt limit would then be reached.56 The 108th Congress, still in the process
of organizing itself, did not immediately respond. Through the winter and into the spring, the
54 U.S. Department of the Treasury, Treasury News, Treasury Statement on the Debt Ceiling, May 14, 2002.
55 For additional details, see U.S. General Accounting Office, Debt Ceiling: Analysis of Actions During the 2002 Debt
Issuance Suspension Period, GAO-03-134, December 2002.
56 Kenneth Dam, Deputy Secretary of the Treasury, letter to Speaker of the House, Dennis Hastert, December 24, 2002,
available at http://www.treas.gov/press/releases/po3718.htm.
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The Debt Limit: History and Recent Increases
Treasury repeatedly requested that the debt limit be raised to avoid serious financial problems. By
February 20, 2003, the Treasury, as in 2002, used legislatively mandated measures to manage
debt holdings of certain government accounts to avoid reaching the debt limit. These actions
included the replacement of internally held government debt with non-debt instruments in certain
government accounts and not issuing new debt to these accounts. These actions allowed the
Treasury to issue additional debt to the public to acquire the cash needed to pay for the
government’s commitments or to issue new debt to other federal accounts.
Through the rest of February and into May, the Treasury held debt subject to limit $15 million
below the debt ceiling.57 The adoption of the conference report on the FY2004 budget resolution
(H.Con.Res. 95; H.Rept. 108-71) on April 11, 2003, in the House triggered the “Gephardt rule”
(House Rule XXVII) that deems to have passed legislation (in this case, H.J.Res. 51) raising the
debt limit to accommodate the spending and revenue levels approved in the adopted budget
resolution.58
The Senate received the debt-limit legislation on April 11, but did not act until May 23, after
receiving further Treasury warnings of imminent default. On that day, debt subject to limit was
$25 million (or 0.0004%) below the existing $6,400 billion limit. The Senate adopted the
legislation, after rejecting eight amendments and sent it to the President, who signed it on May
27. This legislation raised the debt limit to $7,384 billion (P.L. 108-24, 117 Stat. 710).
The Debt Limit Issue in 2004
In January 2004, CBO estimated that the debt limit, then set at $7,384 billion, would be reached
the following summer.59 In June 2004, the Treasury asked Congress to raise the debt limit in order
to avoid the disruptions to government finances experienced in the previous two years.60 In
August, and again in September, the Treasury declared that the debt limit would be reached in the
first half of October. On October 14, debt subject to limit reached $7,383,975 million, just $25
million below the existing limit. The Treasury employed methods used in the previous two years
to keep debt under the legal limit. On October 14, Secretary of the Treasury John Snow informed
Congress, just before the election recess, that available measures to avoid breaching the debt limit
would be exhausted by mid-November.61 Without an increase in the debt limit, the Treasury
would be unable to meet all of the government’s existing obligations, which could undermine the
U.S. government’s reputation in capital markets and raise costs of federal borrowing.
Although the House passed a budget resolution for FY2005 in the spring of 2004, it did not reach
final agreement with the Senate on the measure. Without a budget resolution passed by Congress,
no resolution to raise the debt limit could be deemed passed by the House automatically under the
Gephardt rule. Consequently, no measure was available to send to the Senate. As the debt
57 The Treasury reduced the amount of debt held by selected federal accounts while it sold an equal (or smaller) amount
of debt to the public. This raised cash needed to pay for ongoing obligations and kept the debt below the limit.
58 The House Budget Committee has some discretion in setting the debt limit level in the House Joint resolution
generated by the Gephardt rule. See CRS Report 98-453, Debt-Limit Legislation in the Congressional Budget Process,
by Bill Heniff Jr., and CRS Report RL31913, Debt Limit Legislation: The House “Gephardt Rule”, by Bill Heniff Jr.
59 U.S. Congress, Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2005 to 2014,
January 2004.
60 Alan Fram, “Congress May Duck Debt Limit Raise,” Oakland Tribune, June 5, 2004.
61 John W. Snow, Secretary of the U.S. Treasury, letter to Senate Majority Leader Bill Frist, October 14, 2004,
available at http://www.treas.gov/press/releases/reports/frist.pdf.
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The Debt Limit: History and Recent Increases
approached the limit through the summer and into the fall, no legislation was moved to raise the
debt limit.
Earlier, in September 2004, the House had added an amendment to the FY2005 Transportation-
Treasury appropriations (H.R. 5025) in an effort to remove the Treasury’s flexibility in financing
the government as federal debt approached and reached the existing limit. Without that flexibility,
the government would be unable to meet its financial obligations as the amount of debt neared the
limit. The legislation cleared the House, but the Senate did not act on it.
After the elections, Senator Frist, on November 16, 2004, introduced legislation (S. 2986) to raise
the debt limit by $800 billion, from $7,384 billion to $8,184 billion. The Senate approved the
increase on November 17, 2004. The House considered and approved the increase on November
18. The President signed the legislation into law (P.L. 108-415, 118 Stat. 2337) on November 19,
2004. Estimates made at that time anticipated the new limit would be reached between August
and December 2005.
Shortly before the increase in the debt limit, the Treasury delayed a debt auction and informed
Congress that it would invoke a “debt limit suspension period” as it had in previous years. The
increase in the debt limit in mid-November allowed the Treasury to reschedule the debt auction
and cancel, before it began, the “debt limit suspension period.”
The Debt Limit Issue in 2005, 2006, and 2007
Debt limit increases in 2005, 2006, and 2007 took a less dramatic path than those in President
Bush’s first term. In 2005, Congress included three reconciliation instructions in the FY2006
budget resolution (H.Con.Res. 95, 109th Congress; April 28, 2005), the third of which directed the
House Committee on Ways and Means and the Senate Finance Committee to report bills raising
the debt limit. The instructions specified a $781 billion debt limit increase, to $8,965 billion, with
a reporting date of no later than September 30, 2005. Neither committee reported a bill to raise
the debt limit.
The adoption of the conference report on the FY2006 budget resolution in late April 2005 also
triggered the Gephardt rule (House Rule XXVII), producing a House Joint Resolution (H.J.Res.
47) that also would raise the debt limit by $781 billion to $8,965 billion. Under the rule, the
resolution was automatically deemed passed by the House and sent to the Senate. Through the
end of the first session of the 109th Congress, the Senate had not considered H.J.Res. 47, nor had
Congress considered a reconciliation bill raising the debt limit as called for in the budget
resolution.
At the end of December 2005, Secretary of the Treasury Snow wrote Congress that the debt limit
would probably be reached in mid-February 2006, although the Treasury could take actions that
maintain the debt below its limit until mid-March. He therefore requested an increase in the debt
limit.62 In two more letters, sent on February 19 and March 6, Secretary Snow advised Congress
that the Treasury was taking measures within its legal discretion to avoid reaching the limit and
that these measures would suffice only until the middle of March 2006. Secretary Snow
authorized actions used previously by the Treasury, including declaring a debt issuance
suspension period. As March began, the government was again close to becoming unable to meet
its obligations. During the week of March 13 the Senate took up H.J.Res. 47. On March 16, the
62 John W. Snow, Secretary of the Treasury, letter to Senator Max Baucus, December 29, 2005, available at
http://www.ombwatch.org/files/budget/pdf/snow_debtlimit_2006.pdf.
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The Debt Limit: History and Recent Increases
Senate passed a debt limit increase after rejecting several amendments. The President’s signature
on March 20, 2006, then raised the debt limit (P.L. 109-182) to $8,965 billion.
In mid-May 2007, Congress passed the conference report (H.Rept. 110-153) on the FY2008
budget resolution. The House’s Gephardt rule, triggered by the adoption of the conference report
on the budget resolution, resulted in the automatic engrossment of a joint resolution (in this case,
H.J.Res. 43, 110th Congress) raising the debt limit by $850 billion to $9,815 billion, and sending
it to the Senate. At the end of July 2007, the Treasury asked Congress to raise the debt limit,
stating the limit would be reached in early October 2007. In August, the CBO Director said that
projections suggested that the limit would be reached in late October or early November. Without
an increase, the Treasury indicated that it would take steps within its legal authority to avoid
exceeding the debt limit. The Senate Finance Committee approved the House resolution (H.J.Res.
43) without changes on September 12, 2007. The Senate then passed the measure on September
27, which the President signed on September 29, 2007 (P.L. 110-91).
The Economic Slowdown and Federal Debt
Fiscal Policy Considerations
Financial markets started showing signs of turmoil in mid-2007 and experienced a serious crisis
in 2008. By late 2007, a serious recession had begun, which lasted until 2009.63 The financial
crisis and recession led to federal actions taken to stabilize the housing and financial markets. The
economic slowdown began with a rapid deceleration of housing prices and a rise in interest rate
spreads between private lending rates and benchmark Federal Reserve rates, indicating an
increasing reluctance of major financial institutions to lend to each other as well as to firms and
individuals. This spurred several major actions to unfreeze credit markets, boost consumption,
and increase spending.
The recession also reduced federal revenues and increased federal spending, which led to large
deficits and a series of debt limit increases. The federal deficit spending spiked to 9.8% of GDP.
While federal deficits have been declining since FY2009, the economic recovery has been weak
compared to recoveries following other post-World War II recessions.
Economic recession affects the federal deficit in several ways. First, falling prices of many assets
and equities can sharply reduce federal revenues from capital gains taxes and from the corporate
tax. Second, individual income taxes, the largest component of federal revenues, may also fall if
jobs are cut and unemployment increases due to economic conditions. Third, “automatic
stabilizers” such as unemployment insurance and income support programs pay out more money
as unemployment rises and the number of households eligible for means-tested benefits rises, thus
increasing federal spending.
Boosting the economy through deficit spending provides a fiscal stimulus if the output levels of
goods and services produced in the nation are below their potential levels. Deficit spending,
however, can help accelerate inflation if output levels are near or at potential levels, and in
addition, exacerbates long-term fiscal challenges.
63 The end of a recession is said to occur when an economy has stopped shrinking, not when it has recovered. See
National Bureau of Economic Research Business Cycle Dating Committee, press release, September 20, 2010,
available at http://www.nber.org/cycles/sept2010.html.
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Raising the Debt Ceiling in 2008, 2009, and 2010
In a March 2008 report, CBO estimated the President’s budget would lead to a $396 billion
deficit in FY2008 and a $342 billion deficit in FY2009.64 The actual deficit for FY2008 reached
$455 billion. In August 2009, CBO estimated the deficit would total $1,587 billion in FY2009
and $1,381 billion in FY2010.65 As a result of the current economic conditions and the actions of
the federal government to bring the economy out of recession, the federal debt limit was raised
twice in the second half of 2008 and twice in 2009.
The House Concurrent Resolution on the Budget (H.Con.Res. 312) recommended policies that
would result in a $10,200 billion debt in FY2009. The Senate Concurrent Resolution on the
Budget (S.Con.Res. 70) recommended policies that would result in a total debt of $10,278 billion
in FY2009.66 Implementing either set of policies would require an increase in the federal debt
limit. The conference agreement (H.Rept. 110-659) also recommended spending levels that would
lead to a debt subject to limit of $10,207 billion in FY2009, a level that would require an increase
in the statutory debt limit. The budget conference report passed the Senate on a 48-45 vote on
June 4, 2008. The House passed the measure on the next day by a 214-210 vote. Agreement on
the FY2009 budget resolution automatically created and deemed passed in the House legislation
(H.J.Res. 92) that would increase the debt limit from its current level of $9,815 billion to $10,615
billion. Because the Senate did not take up H.J.Res. 92, the debt limit remained at $9,815 billion.
Subsequently, the House passed an amended version of the Housing and Economic Recovery Act
of 2008 (H.R. 3221) by a vote of 272-152 that included a debt limit increase to $10,615 billion on
July 23, 2008. The Senate then passed the measure on July 26 on a 72-13 vote. The President
signed the bill on July 30 (P.L. 110-289), increasing the debt limit. In addition to increasing the
debt limit, the act also contained provisions that would temporarily authorize the Secretary of the
Treasury to extend a line of credit to mortgage guarantee agencies Freddie Mac and Fannie Mae.
The act also created the a new independent agency called the Federal Housing Finance Agency
(FHFA), which replaced the Department of Housing and Urban Development Office of Federal
Housing Enterprise Oversight (OFHEO) and the Federal Housing Finance Board (FHFB).
While CBO indicated that it was more likely than not that such intervention would not be needed,
it also estimated a 5% chance of a cost to taxpayers of more than $100 billion.67 Because debt
subject to limit was just $339 billion less than the debt ceiling of $9,815 billion when the Senate
passed H.R. 3221, some financial market participants may have worried that the debt limit,
without an increase, might have hindered the Treasury Secretary’s ability to intervene to support
Freddie Mac and Fannie Mae. On September 7, 2008, the FHFA placed Fannie Mae and Freddie
Mac in conservatorship, providing FHFA with the full powers to control the assets and operations
of the firms.
64 U.S. Congress, Congressional Budget Office, An Analysis of the President’s Budgetary Proposals for Fiscal Year
2009, Table 1.1, March 2008, available at http://www.cbo.gov/ftpdocs/89xx/doc8990/03-19-AnalPresBudget.pdf.
64 U.S. Congress, Congressional Budget Office, The Budget and Economic Outlook: An Update, Table 1-1, August
2009, available at http://www.cbo.gov/doc.cfm?index=10521.
65 Goldman Sachs U.S. Research, “US Daily: The Fiscal 2008 Deficit—Likely to Top $500 Billion,” March 25, 2008.
66 U.S. Congress, House Committee on the Budget, Report to Accompany H. Con. Res. 312, 110th Cong., 2nd sess.,
H.Rept. 110-543, March 2008, p. 99; U.S. Congress, Senate Committee on the Budget, Report to Accompany S. Res.
70, S.Prt. 110-039, March 2008.
67 U.S. Congress, Congressional Budget Office, Cost Estimate for H.R. 3221 “Housing and Economic Recovery Act of
2008” As passed by the Senate on July 11, 2008, with an amendment transmitted to CBO on July 22, 2008, July 24,
2008, available at http://www.cbo.gov/ftpdocs/95xx/doc9597/hr3221.pdf.
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Since the deprivatization of Fannie Mae and Freddie Mac, the federal government has acted to
provide stability to financial markets.68 On September 20, 2008, the U.S. Treasury submitted a
proposal to Congress to authorize the Treasury Secretary to buy mortgage-related assets in order
to stabilize financial markets. The Treasury proposal would allow Treasury holdings of mortgage-
related securities up to $700 billion and would raise the debt limit to $11,315 billion.69
Representative Barney Frank proposed an amendment (Emergency Economic Stabilization Act of
2008) to a vehicle measure (H.R. 3997) that incorporated the main tenets of the Treasury proposal
including raising the debt limit to $11,315 billion.70 On September 29, 2008, however, the House
rejected that amendment.
On October 1, 2008, the Senate voted on, and passed, a different version of the Emergency
Economic Stabilization Act of 2008 (H.R. 1424) that included the same debt limit increase.71 The
House passed H.R. 1424 on October 3, 2008, and it was signed into law by the President (P.L.
110-343) on the same day, raising the debt limit to $11,315 billion.
Current economic conditions led Congress to consider another economic stimulus measure. This
measure contains both tax cuts and spending increases, which will increase the deficit by
reducing revenues and increasing outlays. The American Recovery and Reinvestment Act of 2009
(ARRA) as passed by the Senate on February 10, 2009 (Division B of the Senate Substitute
amendment to H.R. 1 and S. 350), contained a provision which would raise the debt limit to
$12,140 billion. The version of this legislation originally passed by the House omitted this
provision. The final conference agreement on ARRA was passed by the House and Senate on
February 13, 2009, and signed by the President on February 17, 2009 (P.L. 111-5). This measure
contained a provision increasing the debt limit to $12,104 billion.
The conference report on the Concurrent Resolution on the Budget for FY2010 (S.Con.Res. 13)
recommended policies that would lead to a debt subject to limit of $13,233 billion in FY2010, a
level that would require an increase in the statutory debt limit. The budget resolution also
contained a revised estimate of debt subject to limit of $12,016 billion for FY2009. The adoption
of this conference report on April 29, 2009, triggered the Gephardt rule (House Rule XXVII),
producing a House Joint Resolution (H.J.Res. 45) that would raise the debt limit by $925 billion
to $13,029 billion. Under the rule, the resolution was automatically deemed passed by the House
and sent to the Senate.
In August 2009, according to media reports, Secretary of the Treasury Timothy Geithner notified
Congress that the debt limit would be reached in mid-October.72 On November 4, the U.S.
Treasury announced that it could postpone the time when federal debt would reach its statutory
limit until the middle or the end of December.73 Treasury dropped nearly $185 billion from its
68 For additional information see CRS Report RS22956, The Cost of Government Financial Interventions, Past and
Present, by Baird Webel, Marc Labonte, and N. Eric Weiss.
69 U.S. Department of the Treasury, “Fact Sheet: Proposed Treasury Authority to Purchase Troubled Assets,” Press
release hp-1150, September 20, 2008, available at http://www.treas.gov/press/releases/hp1150.htm.
70 U.S. Congress, House Financial Services Committee, Emergency Economic Stabilization Act of 2008 (Amendment
to the Senate Amendment to H.R. 3997), available at http://www.house.gov/apps/list/press/financialsvcs_dem/
amend_001_xml.pdf. For text of debt limit provision, see Congressional Record, (September 29, 2008), p. H10355.
71 U.S. Congress, Senate Banking, Housing, and Urban Affairs Committee, Emergency Economic Stabilization Act of
2008 (In the Nature of a Substitute to H.R. 1424), available at http://banking.senate.gov/public/_files/
latestversionAYO08C32_xml.pdf.
72 CQ Weekly, “Fall 2009 Outlook: Debt Limit Increase,” September 7, 2009, p. 1966.
73 U.S. Treasury, “November 2009 Quarterly Refunding Statement,” press release tg346, November 4, 2009,
http://www.ustreas.gov/press/releases/tg346.htm; David Clarke and CQ Staff, “Treasury Gives Congress More
(continued...)
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balance sheet by reducing the amount of loans available through the Supplemental Financing
Program, an emergency loan program created in the days following Lehman Brothers’
bankruptcy, from $200 billion to $15 billion, which extended the time until the debt limit would
be reached.74 According to media reports, the Obama Administration also contemplated scaling
back the Troubled Asset Relief Program (TARP), which could also lower federal debt subject to
statutory limit. Repayments of TARP funds by major financial institutions could also lower the
amount of debt subject to limit.75 Other measures, such as those taken in 2003 during a “debt
issuance suspension period” (described above), could also have extended the U.S. Treasury’s
ability to operate within the debt limit. On the other hand, the U.S. Treasury was scheduled to
issue $48 billion of nonmarketable securities to the FDIC on December 30 and to make interest
payments to various federal trust funds on December 31 totaling about $100 billion, according to
Wall Street analysts, which in the absence of a debt limit increase, could have challenged
Treasury’s debt management activities in the absence of special accounting measures.76
In mid-December, according to media reports, senior Members of the House chose to forgo a
larger increase in the debt limit in favor of a smaller increase in the debt limit that would allow
the U.S. Department of the Treasury to continue normal debt management operations for two
months or so.77 H.R. 4314, a measure to raise the debt limit to $12,394 billion, was introduced on
December 15, 2009, and passed by the House the next day on a 218-214 vote. The Senate passed
it on December 24 by a 60-39 vote, and the President signed the measure on December 28. On
January 28, the Senate passed an amended version of H.J.Res. 45 on a 60-39 vote. The measure
would raise the debt ceiling by $1,900 billion, to $14,294 billion.78 In addition, one amendment to
impose certain pay-as-you-go (PAYGO) restrictions was approved on a 60-40 vote.79
Some Members of Congress have called for the creation of a national commission to address
federal debt and the government’s fiscal situation, which could be enabled through a measure
linked to an increase in the debt limit.80 An amendment (S.Amdt. 3302 to S.Amdt. 3299) to
H.J.Res. 45 that would have established a “Bipartisan Task Force for Responsible Fiscal Action”
was not approved on a 53-46 vote, having failed to reach 60 votes, on January 26, 2010. President
Obama then charged a National Commission on Fiscal Responsibility and Reform (Fiscal
Commission) with identifying “policies to improve the fiscal situation in the medium term and to
(...continued)
Breathing Room on Debt Limit,” CQ Today Online News, November 4, 2009.
74 For details, see Joseph Haubrich and John Lindner, “The Supplemental Financing Program,” Economic Trends,
Federal Reserve of Chicago, September 28, 2009, available at http://www.clevelandfed.org/research/trends/2009/1009/
03monpol.cfm.
75 The Money Market Observer: Wrightson ICAP’s Weekly Newsletter, December 7, 2009.
76 The Money Market Observer: Wrightson ICAP’s Weekly Newsletter, November 30, 2009.
77 Paul Kane, “House Democrats Discard Larger Debt Limit,” Washington Post, December 15, 2009, p. A4.
78 CQ Today Midday Update, “Senate Sends Debt Ceiling Increase to House,” January 28, 2010.
79 S.Amdt. 3305. A second amendment (S.Amdt. 3300), approved on a 97-0 vote, provides certain protections to the
Social Security program. Other amendments were not approved.
80 Jonathan Weisman and John D. McKinnon, “White House Weighs New Panel to Tackle Deficit: Bipartisan
Commission Considered As Administration Seeks to Show Resolve on a Problem that Dogs Its Broader Agenda,” Wall
Street Journal, November 26, 2009, p. A10.
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link to page 24 link to page 24 The Debt Limit: History and Recent Increases
achieve fiscal sustainability over the long run.”81 The Fiscal Commission issued a report on
December 1, 2010, and several commissioners issued their own fiscal proposals as well.82
The House approved H.J.Res. 45 on a 233-187 vote on February 4, forwarding the measure to the
President. The Obama Administration had previously voiced its strong support for a debt limit
increase.83 The President signed the measure (P.L. 111-139) on February 12, 2010.
Raising the Debt Ceiling in 2011
The 2011 debt limit episode was longer and more contentious compared to those that preceded it.
The 2011 episode was resolved by passage of the Budget Control Act of 2011, which reinstated
statutory caps on discretionary spending and created other means of constraining federal
spending.
Secretary Geithner Invokes Extraordinary Measures in May 2011
On May 16, 2011, U.S. Treasury Secretary Timothy Geithner announced that the federal debt had
reached its statutory limit and declared a debt issuance suspension period, which would allow
certain extraordinary measures to extend Treasury’s borrowing capacity until about August 2,
2011.84 On July 1, 2011, the U.S. Treasury confirmed its view that its borrowing authority would
be exhausted on that day.85
While many of the extraordinary measures have been used by previous Treasury Secretaries, the
funding provided by those measures may buy much less time than in previous debt limit episodes.
Given the size of the FY2011 federal deficit, projected to reach $1,399 billion according to the
latest Congressional Budget Office (CBO) baseline estimates, those extraordinary measures may
provide limited additional time before the federal government becomes unable to meet its
financial obligations.86
Slowing the growth in federal debt by cutting spending had been suggested by some
commentators as a means of avoiding an increase in the debt limit. The scale of required spending
reductions, as of late spring 2011, would likely have approximately equaled total discretionary
spending for the last five months of FY2011, which ended on September 30, 2011.87
81 Executive Order 13531, “National Commission on Fiscal Responsibility and Reform,” February
18, 2010; 75 FR 7927, February 23, 2010.
82 National Commission on Fiscal Responsibility and Reform, The Moment of Truth, report, December 1, 2010,
available at http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/
TheMomentofTruth12_1_2010.pdf.
83 U.S. Office of Management and Budget, “H.J.Res. 45—Increasing the Statutory Limit on the Public Debt,”
Statement Of Administration Policy, January 20, 2010, available at http://www.whitehouse.gov/omb/assets/sap_111/
saphjr45s_20100120.pdf.
84 Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated May 16, 2011,
available at http://www.treasury.gov/connect/blog/Documents/20110516Letter%20to%20Congress.pdf.
85 U.S. Treasury, “Treasury: No Change to August 2 Estimate Regarding Exhaustion of U.S. Borrowing Authority,”
Press release tg-1225, July 1, 2011, available at http://www.treasury.gov/press-center/press-releases/Pages/tg1225.aspx.
86 U.S. Congressional Budget Office, “An Analysis of the President’s Budgetary Proposals for Fiscal Year 2012,” April
15, 2011, available at http://www.cbo.gov/doc.cfm?index=12130.
87 For details, see CRS Report R41633, Reaching the Debt Limit: Background and Potential Effects on Government
Operations, coordinated by Mindy R. Levit. The 2011 debt limit episode is described in the section entitled “Raising
the Debt Ceiling in 2011.”
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On July 15, the U.S. Treasury announced that it had suspended reinvestment in the Exchange
Stabilization Fund, one of the last available extraordinary measures before its borrowing authority
(according to Treasury projections) would be exhausted on August 2.88 One analyst, who had not
expected this step to be taken until August 1, stated that the U.S. Treasury may have less
headroom for cash management than previously anticipated.89 Thus, funding federal operations
could soon become increasingly complicated without a debt limit increase.90 An independent
analysis of Treasury cash flows, based on imputations from past Treasury reports, projects that
from August 3 through the end of the month, cash inflows would total $174.4 billion, about
$134.3 billion less than projected outflows of $306.7 billion.91 Cash flow projections are subject
to significant uncertainties.
Treasury estimates of when the debt limit would begin to bind and how long extraordinary
measures would suffice to meet federal obligations have shifted since the Treasury Secretary’s
January 6, 2011, letter to Congress requesting a debt limit increase. Higher individual income tax
revenues helped expand the headroom between the federal debt and its limit in late April. Sales of
mortgage-backed securities (MBSs) also provided a relatively small amount of additional
headroom. Estimates calculated by others of when Treasury would reach the debt limit and how
long extraordinary measures would extend federal borrowing capacity have typically been close
to Treasury’s estimates.92 Such estimates require analysis of federal spending patterns, the pace of
federal debt redemptions and refinancings, and the inflow of receipts, each of which is subject to
uncertainties.
The Treasury Secretary, in a letter to Congress dated May 2, 2011, had indicated that he would
declare a debt issuance suspension period on May 16, unless Congress acted beforehand, which
would allow certain extraordinary measures to extend Treasury’s borrowing capacity until early
August 2011.93 Certain measures that rely on the Treasury Secretary’s existing authority, such as
the draw-down of the Supplementary Financing Program (SFP), have already taken place. The
SFP, an initiative intended to help manage monetary policy, had been drawn down from $200
billion to $5 billion to provide additional headroom under the limit.94 New issues of State and
Local Government Series (SLGS) Treasury securities were suspended on May 6, 2011.
On January 6, 2011, Treasury Secretary Geithner sent a letter to Senate Majority Leader Harry
Reid requesting an increase in the debt limit. At that time, Secretary Geithner stated that federal
debt would likely reach its statutory limit between March 31 and May 16, 2011.95 On April 4, the
88 U.S. Treasury, “Update: As Previously Announced, Treasury to Employ Final Extraordinary Measure to Extend U.S.
Borrowing Authority Until August 2,” press release TG-1243, available at http://www.treasury.gov/press-center/press-
releases/Pages/tg1243.aspx.
89 Wrightson ICAP, The Money Market Observer, July 18, 2011.
90 Wrightson ICAP, The Money Market Observer, May 2, 2011.
91 Bipartisan Policy Center, “Debt Limit Analysis,” June 27, 2011, available at http://www.bipartisanpolicy.org/sites/
default/files/Debt%20Ceiling%20Analysis%20FINAL_0.pdf.
92 Wrightson ICAP, The Money Market Observer, May 2, 2011; Secretary of the U.S. Treasury Timothy Geithner,
letter to Majority Leader Harry Reid, dated January 6, 2011, available at http://www.treasury.gov/connect/blog/
Documents/Letter.pdf.
93 Secretary of the U.S. Treasury Timothy Geithner, letter to Speaker John Boehner, dated May 2, 2011, available at
http://www.treasury.gov/connect/blog/Documents/FINAL%20Debt%20Limit%20Letter%2005-02-
2011%20Boehner.pdf. The same text was sent to all Members.
94 U.S. Treasury, “Treasury Announces Marketable Borrowing Estimates,” press release TG-1155, May 2, 2011,
available at http://www.treasury.gov/press-center/press-releases/Pages/tg1155.aspx.
95 Paul M. Krawzak, “Showdown Ahead on Debt Limit as Geithner Urges Action,” CQ Today Online News, January 6,
2011; Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated January 6, 2011.
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Treasury Secretary wrote Congress that estimates indicated that federal debt would reach its limit
between April 15 and May 31, 2011.96 The U.S. Treasury had also previously projected that its
borrowing capacity, even using extraordinary measures, would be exhausted about July 8, 2011.97
A bill (H.R. 1954) to raise the debt limit to $16,700 billion was introduced on May 24 and was
defeated in a May 31, 2011, House vote of 97 to 318. The House passed the Cut, Cap, and
Balance Act of 2011 (H.R. 2560; 234-190 vote) on July 19, 2011. On July 22, the Senate tabled
the bill on a 51-46 vote. The measure would have increased the statutory limit on federal debt
from $14,294 billion to $16,700 billion once a proposal for a constitutional amendment requiring
a balanced federal budget was transmitted to the states.
The Budget Control Act of 2011
On July 25, 2011, legislation entitled the Budget Control Act of 2011 was introduced in different
forms by both House Speaker Boehner (House Substitute Amendment to S. 627) and Majority
Leader Reid (S.Amdt. 581 to S. 1323).98 Subsequently, on August 2, 2011, President Obama
signed into law a revised compromise measure (Budget Control Act; BCA; P.L. 112-25),
following House approval by a vote of 269-161 on August 1, 2011, and Senate approval by a vote
of 74-26 on August 2, 2011, which eliminated the need for further increases in the debt limit until
early 2013.
The BCA included numerous provisions aimed at deficit reduction in tandem with provisions
allowing a series of increases in the debt limit of up to $2,400 billion ($2.4 trillion) subject to
certain conditions.99 Major provisions of the BCA
imposed discretionary spending caps, enforced by automatic spending reductions,
referred to as a sequester;100
established a Joint Select Committee on Deficit Reduction, whose
recommendations would be eligible for expedited consideration;
required a vote on a joint resolution on a proposed constitutional amendment to
mandate a balanced federal budget;101 and
96 U.S. Treasury, “Treasury Issues Updated Debt Limit Projections,” March 1, 2011, available at
http://www.treasury.gov/press-center/press-releases/Pages/tg1084.aspx.
97 Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated April 4, 2011, available
at http://www.treasury.gov/connect/blog/Documents/FINAL%20Letter%2004-04-
2011%20Reid%20Debt%20Limit.pdf.
98 Consideration of this measure began on July 25, 2011, following legislation introduced by House Speaker Boehner
(House Substitute Amendment to S. 627) and Majority Leader Reid (S.Amdt. 581 to S. 1323). Speaker Boehner’s
proposal passed the House on July 29, 2011, by a vote of 218-210. Neither proposal passed in the Senate.
99 For details, see CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr., Elizabeth Rybicki, and
Shannon M. Mahan.
100 Sequestration is a mechanism that directs the President to cancel budget authority or other forms of budgetary
resources in order to reach specified budget reduction targets. Balanced Budget and Emergency Deficit Control Act of
1985 (P.L. 99-177), often known as Gramm-Rudman-Hollings (GRH), introduced sequestration procedures into the
federal budget process. Those sequestration procedures were modified in subsequent years to address separation of
powers issues and other concerns. For details, see CRS Report R41901, Statutory Budget Controls in Effect Between
1985 and 2002, by Megan S. Lynch. Also see The Budget Control Act and Alternate Defense and Non-Defense
Spending Paths, FY2012-FY2021, congressional distribution memorandum, November 16, 2012, available from
authors upon request.
101 See CRS Report R41907, A Balanced Budget Constitutional Amendment: Background and Congressional Options,
by James V. Saturno and Megan S. Lynch.
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instituted a mechanism allowing for the President and the Treasury Secretary to
raise the debt ceiling, subject to congressional disapproval.
Debt Limit Increases Under the BCA
The legislation provides a three-step procedure by which the debt limit can be increased. First, the
debt limit was raised by $400 billion, to $14,694 billion on August 2, 2011, following a
certification of the President that the debt was within $100 billion of its legal limit.102
A second increase of $500 billion occurred on September 22, 2011, which was also triggered by
the President’s certification of August 2. The second increase, scheduled for 50 days after that
certification, was subject to a joint resolution of disapproval. Because such a resolution could be
vetoed, blocking a debt limit increase would be challenging. The Senate rejected a disapproval
measure (S.J.Res. 25) on September 8, 2011, on a 45-52 vote. The House passed a disapproval
measure (H.J.Res. 77) on a 232-186 vote, although the Senate declined to act on that measure.
In late December 2011, the debt limit came within $100 billion of its statutory limit, which
triggered a provision allowing the President to issue a certification that would lead to a third
increase of $1.2 trillion.103 That increase was also subject to a joint resolution of disapproval. The
President reportedly delayed that request to allow Congress to consider a disapproval measure.104
The third increase could also have been triggered in two other ways.105 A debt limit increase of
$1.5 trillion would have been permitted if the states had received a balanced budget amendment
for ratification. A measure (H.J.Res. 2) to accomplish that, however, failed to reach the
constitutionally mandated two-thirds threshold in the House in a 261–165 vote held on November
18, 2011.106 The debt limit could also have been increased by between $1.2 trillion and $1.5
trillion had recommendations from the Joint Select Committee on Deficit Reduction, popularly
known as the Super Committee, been reported to and passed by each chamber. If those
recommendations had been estimated to achieve an amount between $1.2 trillion and $1.5 trillion,
the debt limit increase would be matched to that figure. The Joint Select Committee, however,
was unable to agree on a set of recommendations. As neither of these two other options apply, the
third increase in the debt limit was $1.2 trillion, matching budget reductions slated to be made
through sequestration and related mechanisms over the FY2013-FY2021 period.
The Debt Limit After 2011
This section provides a brief summary of debt limit policy developments after 2011. A more
extensive analysis of recent debt limit developments since 2012 can be found in CRS Report
R43389, The Debt Limit Since 2011, by D. Andrew Austin.
102 White House, Message from the President to the U.S. Congress, August 2, 2011, available at
http://m.whitehouse.gov/the-press-office/2011/08/02/message-president-us-congress.
103 For example, on December 30, 2011, debt subject to limit was $15,180 billion, just $14 billion below its statutory
limit. The U.S. Treasury pays interest to Social Security and certain other trust funds in the form of Treasury securities
at the end of June and December, which increases debt subject to limit.
104 CQ Roll Call Daily Briefing, January 3, 2012.
105 Congress could have considered a joint resolution of disapproval for this increase.
106 Ratification requires approval by legislatures of three-fourths of the states. Article V specifies other means of
amendment involving constitutional conventions as well.
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Debt Limit Suspended in Early 2012
The debt limit increases permitted through the BCA were sufficient to meet federal obligations
until the last day of 2012. Treasury Secretary Geithner again invoked extraordinary measures that
were expected to last until mid-February to mid-March.107 On January 23, 2013, the House passed
H.R. 325, a measure to suspend the debt limit until May 19, 2013, on a 285-144 vote. A new debt
limit would then be set on May 19.108 The Senate passed the measure on January 31 on a 64-34
vote; it was then signed into law (P.L. 113-3) on February 4. Enactment of that law allowed the
U.S. Treasury to replenish funds that had been used to meet federal payments, thus resetting its
ability to use extraordinary measures.
Debt Limit Suspension Expires in May 2013
Once the debt limit suspension lapsed after May 18, 2013, the U.S. Treasury reset the debt limit at
$16,699 billion, or $305 billion above the previous statutory limit. On May 20, 2013, the first
business day after the expiration of the suspension, debt subject to limit was just $25 million
below the limit. Treasury Secretary Jacob Lew, who succeeded Timothy Geithner, notified
Congress on that day that he had declared a new debt issuance suspension period (DISP),
triggering authorities that allow the Treasury Secretary to use extraordinary measures. Secretary
Lew sent several other notices to Congress that included updated forecasts of the expected date
when the U.S. Treasury’s borrowing capacity would be exhausted. That date was pushed back due
to stronger than expected revenue collections along with special dividends from mortgage giants
Fannie Mae and Freddie Mac. Secretary Lew’s September 25, 2013, letter to Congress stated the
U.S. Treasury expected that it would exhaust its borrowing capacity no later than October 17.
Debt Limit Suspended Again as Part of Package to End
Government Shutdown in October 2013
The evening before October 17, 2013, when the U.S. Treasury’s borrowing capacity was
projected to be exhausted, Congress passed a continuing resolution (Continuing Appropriations
Act, 2014; H.R. 2775; P.L. 113-46), which ended the shutdown of the federal government that
had commenced at the start of the federal fiscal year on October 1 and included a provision to
suspend the debt limit until February 8, 2014.109
Debt Limit Reinstated in March 2015
After the suspension ended on February 7, 2014, the U.S. Treasury reset the debt limit to $17,212
billion and the Treasury Secretary invoked authorities to use various extraordinary measures.110
107 Treasury Secretary Timothy Geithner, letter to Senate Majority Leader Harry Reid, December 26, 2012. Identical
letters were sent to other congressional leaders. Presently and in similar past circumstances, the U.S. Treasury has held
debt subject to limit $25 million below the statutory limit. Large biannual interest payments to certain trust funds are
due on December 31.
108 Ways & Means Chair David Camp, House debate, Congressional Record, vol. 159 (January 23, 2013), p. H237.
109 That measure passed the Senate on an 81-18 vote. The House then passed the measure on a 285-144 vote. The
President signed the bill (P.L. 113-46) on October 17, 2013. The measure suspended the debt limit until February 8,
2014, once the President certified that the U.S. Treasury would be unable to meet existing commitments without
issuing debt. The Presidential certification was subject to a disapproval resolution. The debt limit provisions are
included as Sec. 1002 of P.L. 113-46, entitled the “Default Prevention Act of 2013.”
110 U.S. Treasury, Daily Treasury Statement, February 10, 2014, https://www.fms.treas.gov/fmsweb/viewDTSFiles?
(continued...)
Congressional Research Service
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The Debt Limit: History and Recent Increases
Congress, however, moved quickly in the following week to address the debt limit issue. On
February 11, the House approved a measure to suspend the debt limit until March 15, 2015.111
The Senate concurred the next day and the President signed the measure (P.L. 113-83) on
February 15, 2014.
Extraordinary Measures Projected to Last Until Early November 2015
Once the debt limit suspension expired on March 16, 2015, the limit was reestablished at $18,113
billion. On that day, Treasury Secretary Lew invoked authorities to employ the same set of
extraordinary measures that have been used in recent years.112 Those authorities were invoked for
a debt issuance suspension period set to extend until July 30, 2015. On July 30, 2015, Treasury
Secretary Lew sent congressional leaders a letter to invoke extraordinary powers until the end of
October.113 Secretary Lew indicated in a separate letter, sent the previous day, that those
extraordinary measures would enable the U.S. Treasury to meet federal financial obligations “for
at least a brief additional period of time” after the end of October.114
On October 1, 2015, Secretary Lew stated that extraordinary measures would be exhausted about
November 5, 2015, although a relatively small cash reserve of $30 billion or less would be on
hand. Lower tax collections and higher trust fund investments, however, reduced Treasury’s
headroom more than had been previously expected. Early in the year, independent analysts
expected those measures to suffice to meet federal obligations until November or even early
December 2015.115 More recent estimates in September 2015 put that date closer to mid-
November 2015.116 Such projections are subject to uncertainties related to fiscal policy changes
and economic conditions.
Concluding Comments
From FY1998 through FY2001, the federal government ran budget surpluses that reduced its
debt. In early 2001, the 10-year budget forecasts projected large and growing surpluses,
indicating rapid reduction in debt held by the public. Some experts had even expressed concern
about consequences of retiring all federal debt held by the public.117 Had such projections been
fulfilled, the debt limit issue would have been mooted for the rest of the decade.
(...continued)
dir=w&fname=14021000.pdf.
111 The House passed an amended version of S. 540, a Senate-passed measure unrelated to the debt limit, by a 221-201
vote. The Senate agreed to the amendment on a 55-43 vote.
112 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other congressional leaders, March 16,
2015; http://www.treasury.gov/initiatives/Documents/Treasury%20Letter%20to%20Congress%20031615.pdf.
113 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other congressional leaders, July 30,
2015; http://www.treasury.gov/initiatives/Documents/Treasury%20Letter%20to%20Congress%20073015.pdf.
114 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other congressional leaders, July 29,
2015; http://www.treasury.gov/connect/blog/Pages/Treasury-Sends-Debt-Limit-Letter-to-Congress.aspx.
115 Wrightson ICAP, The Money Market Observer, June 22, 2015.
116 Alex Phillips, “Q&A on a Government Shutdown and the Debt Limit” Goldman Sachs US Daily, September 21,
2015; Wrightson ICAP, The Money Market Observer, “Debt Ceiling Outlook,” September 28, 2015.
117 Testimony of Federal Reserve Chairman Alan Greenspan, in U.S. Congress, Senate Committee on the Budget,
Outlook for the Federal Budget and Implications for Fiscal Policy, hearings, 107th Cong., 1st sess., January 25, 2001,
available at http://www.federalreserve.gov/boarddocs/testimony/2001/20010125/default.htm.
Congressional Research Service
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The Debt Limit: History and Recent Increases
The short span of surpluses again turned to a longer string of deficits due to the combined effects
of higher military and security spending following the attacks of September 11, 2001; rising
nondefense outlays in areas such as education, veterans’ care and benefits, and tax reductions in
2001 and 2003; as well as the expiration of statutory caps on discretionary spending in 2002.
The financial crisis of 2007-2009 and the subsequent economic recession led to large federal
deficits that accelerated the growth of total debt, which necessitated a series of debt limit
increases. Past experience suggests that direct fiscal costs of a financial crisis, such as costs of
bailing out financial institutions, are dwarfed by the effects of diminished tax revenues and
elevated social safety net benefits.118
Debate during the 2011 debt limit episode reflected a growing concern with the fiscal
sustainability. Over the next decade, without major changes in federal policies, persistent and
possibly growing deficits, along with the ongoing growth in the debt holdings of government
accounts, would increase substantially the amount of federal debt. CBO has been warning for
several years that the current trajectory of federal borrowing is unsustainable and could lead to
slower economic growth in the long run as debt rises as a percentage of GDP. Unless federal
policies change, Congress would repeatedly face demands to raise the debt limit to accommodate
the growing federal debt in order to provide the government with the means to meet its financial
obligations.
118 Carmen M. Reinhardt and Kenneth S. Rogoff, This Time is Different: Eight Centuries of Financial Folly,
(Princeton: Princeton, NJ, 2009).
Congressional Research Service
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link to page 31 The Debt Limit: History and Recent Increases
Appendix A. Debt Subject to Limit by Month Since
September 2001
Table A-1 provides data on the dollar amount, in current dollars, of federal debt and the changes
in these amounts by month between the end of September 2001 (the end of FY2001) and the end
of August 2015. The table shows outstanding monthly balances, subject to the debt limit, of total
federal debt, debt held by government accounts, and debt held by the public.
All three measures of debt subject to limit have increased since the end of FY2001, the last year
in which the federal government ran a budget surplus. From the end of September 2001 (the end
of FY2001) to the end of September 2014, total federal debt increased by $12,048 billion, debt
held in government accounts increased by $2,576 billion, and debt held by the public increased
by $9,473 billion.
All three measures experienced periodic reductions in some months. Because federal receipts and
outlays are spread unevenly over the fiscal year, debt may rise or fall in a given month, even if
debt measures follow an overall increasing trend.
Table A-1. Debt Subject to Limit by Month, September 2001-August 2015
In millions of current dollars
Held by Government
Accounts
Held by the Public
Change
Change
Change
from
from
from
End of
Previous
Previous
Previous
Month
Total
Period
Period
Period
Sept. 2001
$5,732,802
—
$2,436,521
—
$3,296,281
—
Oct. 2001
5,744,523
$11,721
2,451,815
$15,294
3,292,709
$-3,572
Nov. 2001
5,816,823
72,300
2,469,647
17,832
3,347,176
54,467
Dec. 2001
5,871,413
54,590
2,516,012
46,365
3,355,401
8,225
Jan. 2002
5,865,892
-5,521
2,525,755
9,743
3,340,138
-15,263
Feb. 2002
5,933,154
67,262
2,528,494
2,739
3,404,659
64,521
Mar. 2002
5,935,108
1,954
2,528,318
-176
3,406,789
2,130
Apr. 2002
5,914,816
-20,292
2,549,438
21,120
3,365,378
-41,411
May 2002
5,949,975
35,159
2,553,350
3,912
3,396,625
31,247
June 2002
6,058,313
108,338
2,630,646
77,296
3,427,667
31,042
July 2002
6,092,050
33,737
2,627,980
-2,666
3,464,070
36,403
Aug. 2002
6,142,835
50,785
2,620,946
-7,034
3,521,890
57,820
Sept. 2002
6,161,431
18,596
2,644,244
23,298
3,517,187
-4,703
Oct. 2002
6,231,284
69,853
2,680,812
36,568
3,550,472
33,285
Nov. 2002
6,294,480
63,196
2,680,788
-24
3,613,692
63,220
Dec. 2002
6,359,412
64,932
2,745,787
64,999
3,613,625
-67
Jan. 2003
6,355,812
-3,600
2,753,301
7,514
3,602,511
-11,114
Congressional Research Service
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The Debt Limit: History and Recent Increases
Held by Government
Accounts
Held by the Public
Change
Change
Change
from
from
from
End of
Previous
Previous
Previous
Month
Total
Period
Period
Period
Feb. 2003
6,399,975
44,163
2,750,471
-2,830
3,649,504
46,993
Mar. 2003
6,399,975
0
2,722,812
-27,659
3,677,163
27,659
Apr. 2003
6,399,975
0
2,731,042
8,230
3,668,933
-8,230
May 2003
6,498,658
98,683
2,755,895
24,853
3,742,763
73,830
June 2003
6,625,519
126,861
2,842,361
86,466
3,783,158
40,395
July 2003
6,704,814
79,295
2,835,566
-6,795
3,869,247
86,089
Aug. 2003
6,743,775
38,961
2,829,387
-6,179
3,914,388
45,141
Sept. 2003
6,737,553
-6,222
2,846,730
17,343
3,890,823
-23,565
Oct. 2003
6,826,668
89,115
2,869,493
22,763
3,957,175
66,352
Nov. 2003
6,879,626
52,958
2,879,117
9,624
4,000,509
43,334
Dec. 2003
6,952,893
73,267
2,940,736
61,619
4,012,157
11,648
Jan. 2004
6,966,851
13,958
2,951,219
10,483
4,015,633
3,476
Feb. 2004
7,049,163
82,312
2,953,123
1,904
4,096,040
80,407
Mar. 2004
7,088,648
39,485
2,941,195
-11,928
4,147,453
51,413
Apr. 2004
7,089,700
1,052
2,960,151
18,956
4,129,549
-17,904
May 2004
7,151,523
61,823
2,973,869
13,718
4,177,653
48,104
June 2004
7,229,320
77,797
3,039,987
66,118
4,189,334
11,681
July 2004
7,271,328
42,008
3,033,396
-6,591
4,237,933
48,599
Aug. 2004
7,305,531
34,203
3,037,149
3,753
4,268,382
30,449
Sept. 2004
7,333,350
27,819
3,056,590
19,441
4,276,760
8,378
Oct. 2004
7,383,975
50,625
3,096,207
39,617
4,287,768
11,008
Nov. 2004
7,464,740
80,765
3,087,834
-8,373
4,376,906
89,138
Dec. 2004
7,535,644
70,904
3,158,531
70,697
4,377,114
208
Jan. 2005
7,567,702
32,058
3,171,089
12,558
4,396,615
19,501
Feb. 2005
7,652,726
85,024
3,176,406
5,317
4,476,320
79,705
Mar. 2005
7,715,503
62,777
3,175,460
-946
4,540,042
63,722
Apr. 2005
7,704,041
-11,462
3,185,364
9,904
4,518,677
-21,365
May 2005
7,717,574
13,533
3,207,232
21,868
4,510,342
-8,335
June 2005
7,778,128
60,554
3,280,914
73,682
4,497,214
-13,128
July 2005
7,829,029
50,901
3,278,725
-2,189
4,550,304
53,090
Aug. 2005
7,868,395
39,366
3,284,696
5,971
4,583,699
33,395
Sept. 2005
7,871,040
2,645
3,300,969
16,273
4,570,071
-13,628
Oct. 2005
7,964,782
93,742
3,345,589
44,620
4,619,193
49,122
Congressional Research Service
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The Debt Limit: History and Recent Increases
Held by Government
Accounts
Held by the Public
Change
Change
Change
from
from
from
End of
Previous
Previous
Previous
Month
Total
Period
Period
Period
Nov. 2005
8,028,918
64,136
3,351,093
5,504
4,677,826
58,633
Dec. 2005
8,107,019
78,101
3,424,304
73,211
4,682,715
4,889
Jan. 2006
8,132,290
25,271
3,442,543
18,239
4,689,747
7,032
Feb. 2006
8,183,975
51,685
3,457,409
14,866
4,726,567
36,820
Mar. 2006
8,281,451
97,476
3,443,602
-13,807
4,837,849
111,282
Apr. 2006
8,262,718
-18,733
3,479,623
36,021
4,783,095
-54,754
May 2006
8,263,812
1,094
3,492,648
13,025
4,771,165
-11,930
June 2006
8,330,646
66,834
3,566,186
73,538
4,764,460
-6,705
July 2006
8,352,614
21,968
3,569,550
3,364
4,783,064
18,604
Aug. 2006
8,423,321
70,707
3,576,166
6,616
4,847,155
64,091
Sept. 2006
8,420,278
-3,043
3,622,378
46,212
4,828,972
-18,183
Oct. 2006
8,498,016
77,738
3,650,241
27,863
4,847,775
18,803
Nov. 2006
8,545,715
47,699
3,649,736
-505
4,895,979
48,204
Dec. 2006
8,592,513
46,798
3,724,450
74,714
4,868,063
-27,916
Jan. 2007
8,619,499
26,986
3,737,894
13,444
4,881,605
13,542
Feb. 2007
8,690,921
71,422
3,744,299
6,405
4,946,622
65,017
Mar. 2007
8,760,735
69,814
3,740,127
-4,172
5,020,608
73,986
Apr. 2007
8,753,070
-7,665
3,778,255
38,128
4,974,815
-45,793
May 2007
8,740,892
-12,178
3,792,201
13,946
4,948,691
-26,124
June 2007
8,779,168
38,276
3,867,819
75,618
4,911,348
-37,343
July 2007
8,845,417
66,249
3,873,239
5,420
4,972,178
60,830
Aug. 2007
8,918,493
73,076
3,854,115
-19,124
5,064,377
92,199
Sept. 2007
8,921,343
2,850
3,903,710
49,595
5,017,633
-46,744
Oct. 2007
8,994,639
73,296
3,958,357
54,647
5,036,281
18,648
Nov. 2007
9,065,827
71,188
3,950,468
-7,889
5,115,358
79,077
Dec. 2007
9,144,715
78,888
4,038,566
88,098
5,106,149
-9,209
Jan. 2008
9,155,842
11,127
4,053,199
14,633
5,102,644
-3,505
Feb. 2008
9,275,683
119,841
4,045,007
-8,192
5,230,676
128,032
Mar. 2008
9,358,135
82,452
4,051,685
6,678
5,306,450
75,774
Apr. 2008
9,298,567
-59,568
4,080,887
29,202
5,217,680
-88,770
May 2008
9,324,137
25,570
4,071,992
-8,895
5,252,144
34,464
June 2008
9,427,901
167,869
4,169,509
134,950
5,258,392
32,920
July 2008
9,520,220
92,319
4,144,377
-25,132
5,375,843
117,451
Congressional Research Service
29
The Debt Limit: History and Recent Increases
Held by Government
Accounts
Held by the Public
Change
Change
Change
from
from
from
End of
Previous
Previous
Previous
Month
Total
Period
Period
Period
Aug. 2008
9,580,508
60,288
4,129,413
-14,964
5,451,095
75,252
Sept. 2008
9,959,850
379,342
4,179,574
50,161
5,780,276
329,181
Oct. 2008
10,504,702
544,852
4,231,878
52,304
6,272,824
492,548
Nov. 2008
10,595,725
91,023
4,228,270
-3,608
6,367,454
94,630
Dec. 2008
10,640,274
44,549
4,298,482
70,212
6,341,792
-25,662
Jan. 2009
10,569,310
-70,964
4,278,424
-20,058
6,290,886
-50,906
Feb. 2009
10,814,630
245,320
4,261,734
-16,690
6,552,896
262,010
Mar. 2009
11,066,217
251,587
4,258,272
-3,462
6,807,946
255,050
Apr. 2009
11,178,827
112,610
4,273,005
14,733
6,905,822
97,876
May 2009
11,260,445
81,618
4,265,719
-7,286
6,994,725
88,903
June 2009
11,487,470
227,025
4,336,673
70,954
7,150,797
156,072
July 2009
11,611,178
123,708
4,299,673
-37,000
7,311,505
160,708
Aug. 2009
11,755,205
144,027
4,294,923
-4,750
7,460,282
148,777
Sept. 2009
11,853,434
98,229
4,325,124
30,201
7,528,311
68,029
Oct. 2009
11,836,629
-16,805
4,372,308
47,184
7,464,321
-63,990
Nov. 2009
12,057,363
220,734
4,367,935
-4,373
7,689,428
225,107
Dec. 2009
12,254,506
197,143
4,466,279
98,344
7,788,227
98,799
Jan. 2010
12,222,507
-31,999
4,485,502
19,223
7,737,005
-51,222
Feb. 2010
12,383,717
161,210
4,469,373
-16,129
7,914,344
177,339
Mar. 2010
12,716,511
332,794
4,448,645
-20,728
8,267,866
353,522
Apr. 2010
12,892,729
176,218
4,480,458
31,813
8,412,271
144,405
May 2010
12,992,539
99,810
4,498,120
17,662
8,494,419
82,148
June 2010
13,149,560
157,021
4,537,716
39,596
8,611,844
117,425
July 2010
13,185,208
35,648
4,504,601
-33,115
8,680,607
68,763
Aug. 2010
13,398,794
213,586
4,493,418
-11,183
8,905,376
224,769
Sept. 2010
13,510,840
112,046
4,509,632
16,214
9,001,208
95,832
Oct. 2010
13,617,337
106,497
4,568,895
59,263
9,048,442
47,234
Nov. 2010
13,809,121
191,784
4,555,396
-13,499
9,253,725
205,283
Dec. 2010
13,972,516
163,395
4,603,888
48,492
9,368,625
114,900
Jan. 2011
14,078,501
105,985
4,614,179
10,291
9,464,322
95,697
Feb. 2011
14,142,331
63,830
4,597,775
-16,403
9,544,556
80,233
Mar. 2011
14,217,862
75,531
4,587,082
-10,693
9,630,780
86,225
Apr. 2011
14,235,938
18,076
4,601,684
14,602
9,634,253
3,472
Congressional Research Service
30
The Debt Limit: History and Recent Increases
Held by Government
Accounts
Held by the Public
Change
Change
Change
from
from
from
End of
Previous
Previous
Previous
Month
Total
Period
Period
Period
May 2011
14,293,975
58,038
4,591,014
-10,671
9,702,961
68,708
June 2011
14,293,975
0
4,572,152
-18,862
9,721,823
18,862
July 2011
14,293,975
0
4,558,417
-13,735
9,735,558
13,735
Aug. 2011
14,638,920
344,946
4,634,731
76,314
10,004,189
268,631
Sept. 2011
14,746,553
107,633
4,639,427
4,697
10,107,126
102,937
Oct. 2011
14,948,905
202,352
4,712,667
73,239
10,236,237
129,112
Nov. 2011
15,110,499
161,593
4,720,541
7,874
10,389,958
153,720
Dec. 2011
15,180,337
69,838
4,752,374
31,833
10,427,963
38,006
Jan. 2012
15,313,699
133,363
4,760,729
8,355
10,552,970
125,007
Feb. 2012
15,446,261
132,562
4,742,635
-18,095
10,703,627
150,656
Mar. 2012
15,538,685
92,424
4,711,229
-31,405
10,827,456
123,829
Apr. 2012
15,649,863
111,177
4,753,094
41,865
10,896,768
69,313
May 2012
15,729,949
80,086
4,742,993
-10,101
10,986,956
90,188
June 2012
15,815,885
85,936
4,790,916
47,922
11,024,969
38,013
July 2012
15,894,576
78,692
4,791,419
503
11,103,158
78,189
Aug. 2012
15,976,711
82,135
4,723,150
-68,269
11,253,560
150,402
Sept. 2012
16,027,021
50,310
4,776,392
53,242
11,250,629
-2,931
Oct. 2012
16,222,235
195,214
4,829,490
53,099
11,392,745
142,116
Nov. 2012
16,330,896
108,660
4,796,486
-33,005
11,534,410
141,665
Dec. 2012
16,393,975
63,079
4,831,097
34,611
11,562,878
28,468
Jan. 2013
16,393,975
0
4,852,316
21,220
11,541,659
-21,219
Feb. 2013
16,647,907
253,932
4,843,910
-8,407
11,803,997
262,338
Mar. 2013
16,732,270
84,363
4,833,686
-10,224
11,898,584
94,586
Apr. 2013
16,790,780
58,510
4,865,781
32,095
11,924,999
26,415
May 2013
16,699,396
-91,383
4,820,273
-45,508
11,879,123
-45,876
June 2013
16,699,396
0
4,816,010
-4,263
11,883,386
4,264
July 2013
16,699,396
0
4,800,133
-15,877
11,899,263
15,877
Aug. 2013
16,699,396
0
4,750,025
-50,108
11,949,372
50,109
Sept. 2013
16,699,396
0
4,740,607
-9,417
11,958,789
9,416
Oct. 2013
17,108,378
408,982
4,938,438
197,831
12,169,941
211,152
Nov. 2013
17,168,987
60,609
4,905,201
-33,238
12,263,786
93,845
Dec. 2013
17,303,558
134,571
4,965,364
60,163
12,338,193
74,407
Jan. 2014
17,245,687
-57,871
4,954,644
-10,720
12,291,043
-47,150
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The Debt Limit: History and Recent Increases
Held by Government
Accounts
Held by the Public
Change
Change
Change
from
from
from
End of
Previous
Previous
Previous
Month
Total
Period
Period
Period
Feb. 2014
17,416,282
170,595
4,940,736
-13,908
12,475,546
184,503
Mar. 2014
17,554,514
138,232
4,952,059
11,323
12,602,455
126,909
Apr. 2014
17,462,107
-92,407
4,975,354
23,295
12,486,753
-115,702
May 2014
17,471,505
9,398
4,950,072
-25,282
12,521,434
34,681
June 2014
17,588,541
117,037
5,032,792
82,720
12,555,748
34,315
July 2014
17,643,346
54,805
5,008,222
-24,569
12,635,123
79,375
Aug. 2014
17,706,419
63,073
4,990,033
-18,189
12,716,386
81,263
Sept. 2014
17,781,107
74,688
5,012,239
22,206
12,768,868
52,482
Oct. 2014
17,895,836
114,729
5,053,819
41,581
12,842,017
73,149
Nov. 2014
17,964,694
68,858
5,056,966
3,147
12,907,728
65,711
Dec. 2014
18,101,296
136,602
5,092,238
35,271
13,009,059
101,332
Jan. 2015
18,043,707
-57,589
5,073,607
-18,630
12,970,100
-38,959
Feb. 2015
18,116,337
72,630
5,057,052
-16,555
13,059,285
89,185
Mar. 2015
18,112,975
-3,362
5,037,253
-19,799
13,075,722
16,437
Apr. 2015
18,112,975
0
5,073,966
36,713
13,039,009
-36,713
June 2015
18,112,975
0
5,074,834
868
13,038,141
-868
July 2015
18,112,975
0
5,051,033
-23,801
13,061,942
23,801
Aug. 2015
18,112,975
0
4,992,344
-58,689
13,120,631
58,689
Sources: U.S. Treasury, Bureau of the Public Debt, Monthly Statement of the Public Debt, various issues; Sept.
2001-August 2015, available at http://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm; CRS calculations.
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The Debt Limit: History and Recent Increases
Appendix B. Major Debt Measures Before the Entry
of United States into World War II
Table B-1. Major Federal Debt Measures, 1898-1941
Statutes at Large
Title
Bill
Public Law
30 Stat. 448
War Revenue Act of June 13, 1898
H.R. 10100
n.a.
32 Stat. 481
Spooner Act of June 28, 1902
—
n.a.
36 Stat. 11
Payne-Aldrich Tariff Act of August 5, 1909
H.R. 1438
P.L. 61-5
40 Stat. 35
First Liberty Bond Act of April 24, 1917
H.R. 2762
P.L. 65-3
40 Stat. 288
Second Liberty Bond Act of September 24, 1917
H.R. 5901
P.L. 65-43
40 Stat. 502
Third Liberty Bond Act of April 4, 1918
H.R. 1123
P.L. 65-120
40 Stat. 844
Fourth Liberty Bond Act of July 9, 1918
H.R. 12580
P.L. 65-192
40 Stat. 1309
Victory Liberty Loan Act of March 3, 1919
H.R. 16136
P.L. 65-328
42 Stat. 227
Revenue Act of November 23, 1921
H.R. 8245
P.L. 67-98
46 Stat. 19
Act of June 17, 1929
H.R. 1648
P.L. 71-11
46 Stat. 775
Act of June 17, 1930
H.R. 1244
P.L. 71-376
46 Stat. 1506
Act of March 3, 1931
H.R. 16111
P.L. 71-820
48 Stat. 337
Gold Reserve Act of January 30, 1934
H.R. 6976
P.L. 73-87
49 Stat. 20
Act of February 4, 1935
H.R. 4304
P.L. 74-3
52 Stat. 447
Act of May 26, 1938
H.R. 10535
P.L. 75-552
53 Stat. 1071
Act of July 20, 1939
H.R. 5748
P.L. 76-201
54 Stat. 516
Revenue Act of June 25, 1940
H.R. 10039
P.L. 76-656
55 Stat. 7
Revenue Act of February 19, 1941
H.R. 2959
P.L. 77-7
Source: Statutes at Large, various volumes, Kenneth D. Garbade, Birth of a Market: The U.S. Treasury Securities
Market from the Great War to the Great Depression (Cambridge: MIT Press, 2012).
Notes: Public law (P.L.) enumeration before the 1930s was not as consistently or commonly used as at present.
Table 7.3 of the FY2012 Budget Historical Tables volume lists measures since 1940 (available at
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist07z3.xls).
n.a. = not available.
Author Contact Information
D. Andrew Austin
Analyst in Economic Policy
aaustin@crs.loc.gov, 7-6552
Congressional Research Service
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