The Debt Limit Since 2011

February 18, 2014 – December 23, 2022 R43389

The Debt Limit Since 2011
Updated December 23, 2022
Congressional Research Service
https://crsreports.congress.gov
R43389

The Debt Limit Since 2011

Summary
The Constitution grants Congress the power to borrow money on the credit of the United States—
one part of Congress’ power of the purse—and thus mandates congressional control over federal
debt. Control of debt policy has at times provided Congress with a means of voicing concerns
about fiscal policies. Debates over federal fiscal policy have been especially animated in the past
decade, in part because of the accumulation of federal debt in the wake of the 2007-2008
financial crisis and subsequent Great Recession, as well as debt accumulated due to responses to
the COVID-19 pandemic starting in March 2020. Rising debt levels, along with continued
differences in fiscal policy views, led to a series of contentious debt limit episodes in recent years.
Just after July 31, 2021, a debt limit suspension, enacted as part of the August 2019 Bipartisan
Budget Act (BBA 2019; P.L. 116-37; H.R. 3877), lapsed. The U.S. Treasury then used
extraordinary measures, allowing use of some civilian retirement funds and certain other smaller
funds to pay federal obligations. As Treasury’s headroom under the debt limit began to dwindle in
mid-October 2021, Congress passed S. 1301, which when signed into law (P.L. 117-50), raised
the debt limit by $480 billion. In mid-December 2021, the debt limit was raised by $2.5 trillion
(P.L. 117-73) to its current level of just under $31.4 trillion.
A 2011 debt limit episode was resolved on August 2, 2011, when President Obama signed the
Budget Control Act of 2011 (BCA; S. 365; P.L. 112-25). The BCA set statutory caps on
discretionary budget authority (BA) and sequestration of non-exempt mandatory spending. The
estimated deficit reduction over the next decade was tied to the scale of three debt limit increases.
Once the BCA was enacted, a presidential certification triggered a $400 billion increase. A second
certification led to a $500 billion increase on September 22, 2011, and a third, $1,200 billion
increase took place on January 28, 2012. Federal debt again reached its limit on December 31,
2012. Extraordinary measures again used to allow payment of government obligations 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), resetting extraordinary measures. On October 16, 2013, enactment of a
continuing resolution (H.R. 2775; P.L. 113-46) resolved a funding lapse and suspended the debt
limit through February 7, 2014. On February 15, 2014, the debt limit was suspended through
March 15, 2015 (P.L. 113-83). On November 2, 2015, the Bipartisan Budget Act of 2015
(BBA2015; H.R. 1314; P.L. 114-74) was enacted, which suspended the debt limit through March
15, 2017, and relaxed discretionary spending limits.
On March 16, 2017, the debt limit was reset at $19,809 billion, which triggered the use of
extraordinary measures. On September 8, 2017, P.L. 115-56 was enacted, which included a
continuing resolution and suspended the debt limit through December 8, 2017. Once that
suspension lapsed—with a new debt limit set at $20,456 billion—U.S. Treasury Secretary Steven
Mnuchin again invoked authorities to employ extraordinary measures. The Bipartisan Budget Act
of 2018 (BBA 2018; P.L. 115-123), enacted on February 9, 2018, suspended the debt limit
through March 1, 2019. After that suspension, the limit was then reset at $21.988 trillion.
Treasury Secretary Mnuchin invoked extraordinary authorities on March 4, 2019. As noted above,
enactment of BBA 2019 on August 2, 2019, resolved the debt limit episode.
Total federal debt increases when the government sells debt to the public to finance budget
deficits, which adds to debt held by the public, or when the federal government issues debt to
certain government accounts, such as the Social Security, Medicare, and Transportation trust
funds, in exchange for their reported surpluses—which adds to debt held by government
accounts; or when new federal loans outpace loan repayments. The sum of debt held by the public
and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the
public, while deficits raise it.
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The Debt Limit Since 2011

Federal Debt Policy and the Debt Limit
The Constitution grants Congress the power to borrow money on the credit of the United States—
one part of its power of the purse—and thus mandates that Congress exercise control over federal
debt. Control of debt policy provides Congress with one means of expressing views on
appropriate fiscal policies.
Before 1917 Congress typically controlled individual issues of debt. In September 1917, while
raising funds for the United States’ entry into World War I, Congress also imposed an aggregate
limit on federal debt in addition to individual issuance limits. Over time, Congress granted
Treasury Secretaries more leeway in debt management. In 1939, Congress agreed to impose an
aggregate limit that gave the U.S. Treasury authority to manage the structure of federal debt.1
The statutory debt limit applies to almost all federal debt.2 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.3 For
most federal trust funds, net inflows by law must be invested in special federal government
securities.4 When holdings of those trust funds increase, federal debt subject to limit will
therefore increase as well. The government’s on-budget fiscal balance, which excludes the “off-
budget” net surplus or deficit of the U.S. Postal Service and the Social Security program, does not
directly affect debt held in government accounts.5
The change in debt held by the public is mostly determined by the government’s total surpluses or
deficits, which are the sum of on-budget and off-budget amounts.6 Off-budget surpluses for much
of the last three decades reduced the need to borrow from the public, although as the Baby Boom
generation has moved into retirement, those surpluses have diminished. The net expansion of the
federal government’s balance sheet through loan programs also increases the government’s
borrowing requirements. Under federal budgetary rules, however, only the net subsidy cost of
those loans is included in the calculation of deficits.7

1 See CRS Report RL31967, The Debt Limit: History and Recent Increases, by D. Andrew Austin.
2 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.
3 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.
4 The National Railroad Retirement Investment Trust, which funds certain railroad retirement benefits, holds a mix of
federal and private assets.
5 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.
6 Federal debt also increases when the U.S. government’s balance sheet expands to fund federal credit programs.
Seigniorage and other adjustments also affect the level of federal debt. For a crosswalk between the annual federal
deficit and the increase in federal debt, see OMB, FY2023 Analytical Perspectives, Table 4-2, Federal Borrowing and
Debt, https://www.whitehouse.gov/wp-content/uploads/2022/03/ap_4_borrowing_fy2023.pdf.
7 For details, see CRS Report R44193, Federal Credit Programs: Comparing Fair Value and the Federal Credit
Reform Act (FCRA), by Raj Gnanarajah.
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The current debt limit of just under $31.4 trillion was set in mid-December 2021, when it was
raised by $2.5 trillion (S.J.Res. 33; P.L. 117-73). Another measure (S. 610; P.L. 117-71) set up an
expedited procedure in the Senate to consider that debt limit increase and also delayed some cost-
saving measures in Medicare and certain other health programs.
Total federal debt outstanding was $31.3 trillion in mid-December 2022. Intergovernmental
debt—mainly held in various federal trust funds—totaled $6.8 trillion. Debt held by the public—
including Federal Reserve holdings of Treasury debt purchased on secondary markets—was
$24.5 trillion.8
Debt Limit in Context
This section describes several issues relevant to recent debt limit episodes and their resolutions.
The Debt Limit and the Budget Control Act of 2011
The Budget Control Act of 2011 (BCA; P.L. 112-25), the result of contentious negotiations over
fiscal policy and the debt limit, shaped how Congress addressed the debt limit in the following
decade (FY2012-FY2021). The BCA established, or rather resurrected, budget enforcement
mechanisms aimed at reducing federal deficits over FY2012-FY2021. Then-Speaker John
Boehner insisted that increases in the debt limit authorized in the BCA be tied to the amount of
spending reductions over that decade. The BCA allowed three increases in the debt limit.9 The
BCA introduced a procedural innovation to debt limit policy by making the latter two increases
subject to a congressional resolution of disapproval. The President can veto a resolution of
disapproval, which Congress can override with a two-thirds vote in each chamber.
Debt Limit and Bipartisan Budget Agreements
The BCA spending reductions were enforced by a set of statutory caps on discretionary budget
authority (BA), a sequester of discretionary BA in 2013, and a sequester of non-exempt
mandatory spending. A sequester is a cancellation of previously authorized spending, although
some used the term to refer to a wider set of BCA budget enforcement mechanisms.
The BCA budgetary constraints helped motivate Members of Congress to negotiate a series of
adjustments to sequesters and spending caps, which served to set top-line discretionary spending
totals. Those negotiations also provided a venue to address the debt limit and other fiscal issues.
Once the BCA spending caps expired at the end of FY2021, that framework for fiscal
negotiations was no longer available.10
Of course, measures to modify the debt limit have often, but not always, been accompanied by
other budgetary measures.11 For instance, in late 2017 and early 2018 the debt limit issue was tied
to consideration of funding measures for FY2018. On September 8, 2017, enactment of a
continuing resolution (Continuing Appropriations Act, 2018 and Supplemental Appropriations for
Disaster Relief Requirements Act, 2017; P.L. 115-56) suspended the debt limit through December

8 U.S. Treasury, Daily Treasury Statement, November 16, 2022, https://fsapps.fiscal.treasury.gov/dts/issues.
9 Additional debt limit increases would have been possible if certain conditions had been met. See BCA § 301(a),
which also describes the resolution of disapproval processes.
10 The BCA sequester of non-exempt mandatory spending was extended several times as a pay-for to offset increases in
BCA discretionary spending caps.
11 See CRS Report R41814, Votes on Measures to Adjust the Statutory Debt Limit, 1978 to Present, by Justin Murray.
The mere inclusion or exclusion of debt limit provisions in a legislative measure need not imply a presence or absence
of a substantive link between those provisions and other matters.
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8, 2018. Once that suspension lapsed, extraordinary measures, which once invoked allow
Treasury to use resources from certain federal retirement trust funds, were used to meet federal
obligations. The Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123), enacted on February
9, 2018, included a provision (Section 30301) that suspended the debt limit through March 1,
2019. The Bipartisan Budget Act (BBA 2019; P.L. 116-37; H.R. 3877), enacted in August 2019,
suspended the debt limit through July 2021. A section at the end of this report summarizes recent
debt limit activity in more detail.
Debt Limit Suspensions
The debt limit suspension was another procedural innovation. The first measure (H.R. 325; P.L.
113-3) to address the debt limit after the BCA, enacted in mid-January 2013, suspended the debt
limit, rather than raising it. For the rest of the time that BCA spending caps were in effect,
Congress mostly chose to suspend the debt limit for a set amount of time instead of raising the
debt limit by a fixed dollar amount. That gives the debt limit suspension two advantages. First, it
sets a minimum interval during which the debt limit need not be addressed. Second, in the
legislative text a date, but not a numerical amount, is specified.
When a suspension ends, the debt limit is reestablished at a level that accommodates federal
spending during the suspension period. The U.S. Treasury is thus left with minimal headroom
under the debt limit after a suspension ends, leaving only a cash balance similar to that when the
suspension began. Therefore, the Treasury Secretary typically invokes a set of extraordinary
measures, which are described below.12
Most debt limit suspensions were set to lapse in February or March.13 Extraordinary measures
(described in more detail below) then typically lasted until late summer, when Congress typically
works to finish annual appropriations
Extraordinary Measures and Debt Issuance Suspension Periods
Congress has authorized the Treasury Secretary to invoke a “debt issuance suspension period,”
which triggers the availability of extraordinary measures, which are special strategies to handle
cash and debt management. 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. In particular, extraordinary strategies include
suspending investments in Civil Service Retirement and Disability Fund (CSRDF) and the G-
Fund of the Federal Employees’ Retirement System (FERS), as well as redeeming a limited

12 See CRS Insight IN10837, “Extraordinary Measures” and the Debt Limit, by Grant A. Driessen and Anthony A.
Cilluffo.
13 See Table 1 below.
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The Debt Limit Since 2011

amount of CSRDF securities.14 The Treasury Secretary is also mandated to make those funds
whole after the resolution of a debt limit episode.15
Modified Gephardt Rule Adopted by House in January 2019
In 1979, Representative Richard Gephardt proposed a House rule that would tie House approval
of an increase in the debt limit to passage of the annual budget resolution, which he argued would
integrate consideration of the debt limit with broader fiscal discussions.16 When that rule was
established, passage of a budget resolution would result trigger the passage and engrossment of a
measure to adjust the debt limit to levels recommended in the budget resolution.
Some contended that Gephardt Rule reduced fiscal accountability by allowing House Members to
avoid a contentious vote. That view led to a repeal of the Gephardt Rule at the start of the 112th
Congress in January 2011.
In January 2019, the House adopted a version of the Gephardt Rule as part of a rules package.
The House typically agrees to a rules package of the start of each Congress that modify some
previous rules. Rule XXVIII states that when the House approves a budget resolution, a measure
to suspend the debt limit for the remainder of the fiscal year would be automatically engrossed
and transmitted to the Senate.17 In the absence of a House budget resolution for the FY2020
budget cycle, that rule played no role in the 2019 debt limit episode.
U.S. Treasury’s Headroom Under the Debt Limit
The U.S. Treasury’s headroom under the debt limit consists of remaining amounts of funds
available for extraordinary measures and available cash reserves. When federal receipts exceed
federal outlays, that headroom expands, except for those receipts or outlays that are linked to
intragovernmental accounts such as Social Security. The headroom gained by those receipts is
exactly offset because Treasury must issue special securities to the appropriate intragovernmental
trust fund, and those securities are subject to the debt limit. Conversely, when outlays are funded
by such intragovernmental accounts, the increase in Treasury’s headroom due to redemption of
special securities is offset by Treasury’s need to provide funding for that redemption either by
drawing down cash balances or additional borrowing.

14 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 to congressional clients 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). For a list of extraordinary measures, see U.S. Government Accountability
Office, Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs, GAO-12-701, July
2012, Table 1, p. 8, at http://www.gao.gov/assets/600/592832.pdf.
15 5 U.S.C. § 8348(j)(3).
16 See CRS Report RL31913, Debt Limit Legislation: The House “Gephardt Rule”, by Bill Heniff Jr. For historical
context, see discussions of debt limit episodes in the 1970s in CRS Report R45011, Clearing the Air on the Debt Limit,
by D. Andrew Austin and Sean M. Stiff. In September 1979, P.L. 96-78 established the Gephardt Rule as Rule XLIX of
the Standing Rules of the House of Representatives.
17 See CRS Report RL31913, Debt Limit Legislation: The House “Gephardt Rule”, by Bill Heniff Jr.
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Timing Uncertainties
The amount of time that extraordinary measures allow the U.S. Treasury to extend its borrowing
capacity depends on the pace of deficit spending, the timing of cash receipts and outlays, and
other technical factors. Tax deadlines and processing dates for some federal disbursements are
scheduled, but amounts of collections and outlays depend on decisions and actions of private
entities and other federal agencies, which are more difficult to predict. Treasury cash flow
projections are therefore subject to uncertainty, which complicates attempts to estimate how long
extraordinary measures would enable the federal government to meet its financial obligations.
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.18 The U.S. Treasury Inspector General reported in 2012 that “the margin of
error in these estimates at a 98 percent confidence level is plus or minus $18 billion for one week
into the future and plus or minus $30 billion for two weeks into the future.”19
An impending debt ceiling constraint presents more than one deadline. A first deadline is the
exhaustion of borrowing capacity. The U.S. Treasury, however, could continue to meet
obligations using available cash balances. As cash balances run down, however, other
complications could emerge and Treasury’s cash resources could fall below levels deemed
prudent by outside advisors well before extraordinary measures were exhausted. Low cash
balances could complicate federal debt management and Treasury auctions.20 The Government
Accountability Office (GAO) has also noted that debt limit episodes generate severe strains for
Treasury staff, especially when its room for maneuver is severely restricted.21 Finally, if the U.S.
Treasury were to run out of cash, the Treasury Secretary would face difficult choices in how to
comply simultaneously with the debt limit and the mandate to pay federal obligations in a timely
fashion.
Severe financial dislocation could result if the U.S. Treasury were unable to make timely
payments.22 For example, repo lending arrangements, which rely heavily on Treasury securities
for collateral, could become more expensive or could be disrupted.23 “Repo” is short for
repurchase agreement, which provides a common means of secured lending among financial
institutions. Repo lending rates rose sharply in early August 2011 during the 2011 debt limit
episode, but fell to previous levels once that episode was resolved.24
The Federal Reserve Open Market Committee indicated in an October 16, 2013, discussion that
“in the event of delayed payments on Treasury securities,” discount window and other operations

18 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, http://www.treasury.gov/connect/blog/Documents/
Letter.pdf.
19 Department of the Treasury, Office of the Inspector General, “Response to Senator Hatch Regarding Debt Limit in
2011,” OIG-CA-12-006, August 24, 2013, enclosure 1, p. 2, http://www.treasury.gov/about/organizational-structure/ig/
Audit%20Reports%20and%20Testimonies/Debt%20Limit%20Response%20%28Final%20with%20Signature%29.pdf.
20 Wrightson ICAP, “Summer Break Issue,” Money Market Observer, September 2, 2013.
21 U.S. Government Accountability Office, Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on
Borrowing Costs, GAO-12-701, July 2012, http://www.gao.gov/assets/600/592832.pdf.
22 For details, see testimony from the Senate Banking Committee hearings of October 10, 2013, noted below.
23 For background, see Tobias Adrian et al., “Repo and Securities Lending,” Federal Reserve of New York Staff Report
No. 529, revised version February 2013, http://www.newyorkfed.org/research/staff_reports/sr529.pdf.
24 RBC Capital Markets, U.S. Economics and Rates Focus, September 25, 2013.
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would proceed “under the usual terms.”25 That statement has been taken to imply that the Federal
Reserve would be “prepared to backstop the Treasury market in the event of a political
deadlock.”26 In addition, the Federal Reserve Bank of New York issued a description of
contingency plans in December 2013 in the event of Treasury payment delays, but warned that
such measures “only modestly reduce, not eliminate, the operational difficulties posed by a
delayed payment on Treasury debt. Indeed, even with these limited contingency practices, a
temporary delayed payment on Treasury debt could cause significant damage to, and undermine
confidence in, the markets for Treasury securities and other assets.”27
Overview of Debt Limit Modifications in the Past Three Decades
Table 1 presents debt limit changes from 1993 through 2011, when the Budget Control Act was
signed into law. Table 2 presents changes from 2013, when the first debt limit suspension was
enacted, through the present.
The debt limit was modified six times from 1993 through 1997. Two of those modifications were
enacted to prevent the debt limit restriction from delaying payment of Social Security benefits in
March 1996 before a broader increase in the debt was passed at the end of that month.
After 1997, debt limit increases were unnecessary due to the appearance of federal surpluses that
ran from FY1998 through FY2001. Since FY2002 the federal government has run persistent
deficits, which have been ascribed to major tax cuts enacted in 2001 and 2003 and higher
spending.28 The 2007-2009 financial crisis, the subsequent Great Recession, tax cuts enacted in
2017, and the COVID-19 pandemic, with its economics and fiscal effects, all helped push deficits
to even higher levels. Those deficits required a series of increases in the debt limit.
Starting with passage of the BCA in August 2011, Congress has employed measures that have led
to debt limit increases that occur some time after a law is enacted. Dates in the first column of
Table 1 in general refer to dates of enactment, which do not match dates when debt limit
increases have occurred. For instance, the debt limit was suspended when P.L. 113-83 was
enacted on February 12, 2014, and was reestablished on March 16, 2015, when that suspension
lapsed. One result of suspending the debt limit, as has been the practice in recent years, is that no
fixed number appears in legislation and that a new debt limit level is set only when the
suspension lapses.

25 Federal Reserve, “FOMC Minutes for October 29-30, 2013 Meeting,” videoconference meeting of October 16, p. 11,
http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20131030.pdf.
26 Wrightson ICAP, “Debt Ceiling Outlook,” Money Market Observer, January 27, 2014.
27 Federal Reserve Bank of New York, Treasury Market Practices Group, Operational Plans for Various Contingencies
for Treasury Debt Payments, December 23, 2013, https://www.newyorkfed.org/medialibrary/microsites/tmpg/files/
Operations_Contingency_Plans.pdf.
28 See CBO, “Changes in CBO’s Baseline Projections Since January 2001,” June 7, 2012, http://www.cbo.gov/sites/
default/files/cbofiles/attachments/06-07-ChangesSince2001Baseline.pdf. According to CBO estimates, over the
FY2002-FY2011 period legislative changes in federal revenue policies accounted for a change of -$6.1 trillion;
legislative changes in spending policies accounted for an estimated increase of $5.6 billion over that period; and
concomitant net interest costs resulted in a change of $1.4 trillion; all relative to the FY2001 CBO current-law baseline.
Economic and technical factors accounted for about 10% of the divergence between FY2001 baseline projections and
actual budget results. The four discretionary subfunctions with the largest real increases in outlays between FY2001
and FY2011 were Defense-Military ($322 billion); Elementary, secondary, and vocational education ($34 billion);
Hospital and medical care for veterans ($25 billion); and Ground transportation ($18 billion), all expressed in FY2013
dollars. The four mandatory subfunctions with the largest real increases in outlays over the same period were Medicare
($221 billion); Social Security ($196 billion); Health care services ($140 billion); and Unemployment compensation
($86 billion). See also Alan J. Auerbach and William G. Gale, “The Economic Crisis and the Fiscal Crisis: 2009 and
Beyond,” Tax Notes special report, October 5, 2009.
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Table 1. Increases in or Modifications of the Debt Limit, 1993-2011
Change From
New Debt Limit
Previous Limit
Date
Public Law (P.L.) Number
($ 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
Source: CRS, compiled using the Legislative Information System, available at http://www.congress.gov; OMB;
and Daily Treasury Statements.
Notes:
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 section “Debt Limit Increases Under the BCA.” 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 $2,100 bil ion.
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Table 2. Debt Limit Suspensions, 2013-2019
Debt
Debt Limit
Subject to
After
Limit After
Debt Limit
Suspension
Date Extraordinary
New
Suspended
Ended
Measures Invoked
Enactment
Law Title
Measure
Public Law
Enactment Date
Through
($Billions)
(DISP)
($Billions)

BCA

P.L. 112-25
---
---
December 31, 2012
16,441
No Budget, No Pay
H.R. 325
P.L. 113-3
February 4, 2013
May 18, 2013
16,699
May 20, 2013
17,026
Act of 2013
Continuing
H.R. 2775
P.L. 113-46
October 17, 2013
February 7, 2014
17,212
February 10, 2014
17,337
Appropriations Act,
2014
Temporary Debt
S. 540
P.L. 113-83
February 15, 2014
March 15, 2015
18,113
March 16, 2015
18,492
Limit Extension Act
BBA2015
H.R. 1314
P.L. 114-74
November 2, 2015
March 15, 2017
19,809
March 16, 2017
20,130
Continuing
H.R. 601
P.L. 115-56
September 8, 2017
December 8, 2017
20,456
December 11, 2017
20,636
Appropriations Act,
2018
BBA 2018
H.R. 1892
P.L. 115-123
February 9, 2018
March 1, 2019
21,988
March 4, 2019
22,286
BBA 2019
H.R. 3877 P.L. 116-37
August 2, 2019
July 31, 2021
28,401
August 2, 2021
28,401
Source: CRS analysis.
Notes: See text for explanations. Amounts rounded to nearest bil ion. BCA added to show the date of the December 2012 DISP declaration. P.L. 117-50 (S. 1301),
enacted on October 14, 2021, raised the debt limit by $480 bil ion. On December 15, 2021, P.L. 117-73 raised the debt limit was raised by $2.5 tril ion to its current
level of just under $31.4 tril ion.
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The Debt Ceiling in 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,
2011.29 Had the U.S. Treasury exhausted its borrowing authority, it could have used cash balances
to meet obligations for some period of time.
Over the course of the 2011 debt limit episode, Treasury estimates of when the debt limit would
begin to bind and how long extraordinary measures would suffice to meet federal obligations
shifted. For instance, in April 2011 the U.S. Treasury had projected that its borrowing capacity,
even using extraordinary measures, would be exhausted by about July 8, 2011.30 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 2011.31
On July 1, 2011, the U.S. Treasury confirmed its view that its borrowing authority would be
exhausted on August 2, the date cited in Treasury Secretary Geithner’s May 16, 2011, letter that
invoked the debt issuance suspension period.32
Proposed Solutions in the Spring of 2011
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. 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. On July 22, the Senate tabled the bill on a 51-46 vote.
Some commentators in early 2011 suggested that cutting federal spending could slow the growth
in federal debt enough to avoid an increase in the debt limit. The scale of required spending
reductions, as of the middle of FY2011, would have been large. For example, at the start of the
third quarter of FY2011 on April 1, 2011, federal debt was within $95 billion of its limit.
According to CBO baseline estimates issued at the time, the expected deficit for the remainder of
FY2011 would be about $570 billion. Reaching the end of FY2011 on September 30, 2011,
without an increase in the debt limit or the use of extraordinary measures would have thus
required a spending reduction of at least $570 billion, or about 85% of discretionary spending for
the rest of that fiscal year.33

29 Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated May 16, 2011,
http://www.treasury.gov/connect/blog/Documents/20110516Letter%20to%20Congress.pdf.
30 Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated April 4, 2011,
http://www.treasury.gov/connect/blog/Documents/FINAL%20Letter%2004-04-2011%20Reid%20Debt%20Limit.pdf.
31 Secretary of the U.S. Treasury Timothy Geithner, letter to Speaker John Boehner, dated May 2, 2011,
http://www.treasury.gov/connect/blog/Documents/FINAL%20Debt%20Limit%20Letter%2005-02-
2011%20Boehner.pdf. The same text was sent to all Members.
32 U.S. Treasury, “Treasury: No Change to August 2 Estimate Regarding Exhaustion of U.S. Borrowing Authority,”
Press release tg-1225, July 1, 2011, http://www.treasury.gov/press-center/press-releases/Pages/tg1225.aspx.
33 According to the U.S. Treasury’s Daily Treasury Statement for April 1, debt subject to limit was $14,198.9 billion,
just $95.1 billion below the limit at that time of $14,294 billion, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&
fname=11040100.pdf. According to the CBO baseline estimates issued in March 2011 (Congressional Budget Office,
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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 rejected such claims, as did
most legal analysts.34
The Budget Control Act of 2011
On July 25, 2011, 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). Subsequently, on August 2, 2011, President Obama signed into law a
substantially 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, 2011.35 This measure included numerous provisions aimed at deficit reduction, and
would allow a series of increases in the debt limit of up to $2,400 billion ($2.4 trillion) subject to
certain conditions.36 These provisions eliminated the need for further increases in the debt limit
until early 2013.
In particular, the BCA included major provisions that
 imposed discretionary spending caps, enforced by automatic spending reductions,
referred to as a “sequester”;37
 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;38 and
 instituted a mechanism allowing for the President and Treasury Secretary to raise
the debt ceiling, subject to congressional disapproval.

An Analysis of the President’s Budgetary Proposals for FY2012, April 15, 2011, http://www.cbo.gov/publication/
22087), the estimated deficit for FY2011 was $1,399 billion and estimated discretionary outlays were $1,361 billion.
According to the April 2011 CBO Monthly Budget Review (http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/
121xx/doc12126/mbr_april_2011.pdf), the deficit for the first half of FY2011 was $830 billion.
34 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, http://www.whitehouse.gov/the-press-office/2011/07/
22/remarks-president-university-maryland-town-hall. Also see CRS Report R45011, Clearing the Air on the Debt
Limit, by D. Andrew Austin and Sean M. Stiff.
35 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.
36 For details, see CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr., Elizabeth Rybicki, and
Shannon M. Mahan.
37 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 to
congressional clients from authors upon request.
38 See CRS Report R41907, A Balanced Budget Constitutional Amendment: Background and Congressional Options,
by James V. Saturno and Megan S. Lynch (available to congressional clients upon request).
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Debt Limit Increases Under the BCA
The legislation set up a three-step procedure to allow a series of debt limit increases in 2011..
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.39
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.
The resulting increase brought the debt limit to $15,194 billion.
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 led to a third increase of
$1,200 billion.40 By design, that increase matched budget reductions slated to be made through
sequestration and related mechanisms over the FY2013-FY2021 period. 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.41 On January 18, 2012, the House passed such a
measure (H.J.Res. 98) on a 239-176 vote. The Senate declined to take up a companion measure
(S.J.Res. 34) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-
passed measure (H.J.Res. 98), thus clearing the way for the increase, resulting in a debt limit of
$16,394 billion.
The third increase could also have been triggered in two other ways.42 A debt limit increase of
$1,500 billion 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, 2011.43 The debt limit could also have been increased by between $1,200 billion and $1,500
billion 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 $1,200 billion and $1,500
billion, the debt limit increase would be matched to that figure. The Joint Select Committee,
however, was unable to agree on a set of recommendations.

39 White House, Message from the President to the U.S. Congress, August 2, 2011, http://m.whitehouse.gov/the-press-
office/2011/08/02/message-president-us-congress.
40 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.
41 CQ Roll Call Daily Briefing, January 3, 2012.
42 Congress could have considered a joint resolution of disapproval for this increase.
43 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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The Debt Limit in 2013
Debt Limit Reached at End of December 2012
On December 26, 2012, the U.S. Treasury stated that the debt would reach its limit on December
31 and that the Treasury Secretary would declare a debt issuance suspension period to authorize
extraordinary measures (noted above, described below) that could be used to meet federal
payments for approximately two months.44 As predicted, federal debt did reach its limit on
December 31, when large biannual interest payments, in the form of Treasury securities, were
made to certain trust funds.45
The U.S. Treasury stressed that these extraordinary measures would be exhausted more quickly
than in recent debt limit episodes for various technical reasons.46 A January 14, 2013, letter from
Treasury Secretary Geithner also estimated that extraordinary measures would be exhausted
sometime between mid-February and early March 2013.47 CBO had previously estimated that
federal debt would reach its limit near the end of December 2012, and that the extraordinary
measures could be used to fund government activities until mid-February or early March 2013.48
During the 112th Congress, Speaker John Boehner had stated that a future debt limit increase
should be linked to spending cuts of at least the same magnitude, a position that reflects the
structure of the Budget Control Act.49
Suspension of the Debt Limit Until May 19, 2013
House Republicans decided on January 18, 2013, to propose a three-month suspension of the debt
limit tied to a provision that would delay Members’ salaries in the event that their chamber of
Congress had not agreed to a budget resolution.50 H.R. 325, according to its sponsor, would allow
Treasury to pay bills coming due before May 18, 2013. A new debt limit would then be set on
May 19.51 The measure would also have caused salaries of Members of Congress to be held in

44 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.
45 The debt issuance suspension period was officially declared on December 31, 2012. See Treasury Secretary Timothy
Geithner, letter to Senate Majority Leader Harry Reid, December 31, 2012, http://www.treasury.gov/initiatives/
Documents/Sec%20Geithner%20Letter%20to%20Congress%2012-31-2012.pdf.
46 See Appendix to the December 26, 2012, letter to Majority Leader Reid, https://www.treasury.gov/connect/blog/
Documents/Sec%20Geithner%20LETTER%2012-26-2012%20Debt%20Limit.pdf.
47 Treasury Secretary Timothy Geithner, letter to House Speaker John A. Boehner, January 14, 2013,
http://www.treasury.gov/connect/blog/Documents/1-14-
13%20Debt%20Limit%20FINAL%20LETTER%20Boehner.pdf.
48 CBO, Federal Debt and the Statutory Limit, November 2012, http://www.cbo.gov/sites/default/files/cbofiles/
attachments/43736-FederalDebtLimit-11-12-12.pdf.
49 Speaker John Boehner, “Address on the Economy, Debt Limit, and American Jobs,” May 16, 2012, prepared text,
http://www.speaker.gov/speech/full-text-speaker-boehners-address-economy-debt-limit-and-american-jobs.
50 Jonathan Weisman, “In Reversal, House G.O.P. Agrees to Lift Debt Limit,” New York Times, January 19, 2013, p.
A1; Speaker John Boehner, “Speaker Boehner: No Budget, No Pay,” speech excerpt, January 18, 2013,
http://www.speaker.gov/speech/speaker-boehner-no-budget-no-pay.
51 Ways & Means Chair David Camp, House debate, Congressional Record, vol. 159 (January 23, 2013), p. H237.
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escrow “(i)f by April 15, 2013, a House of Congress had not agreed to” a budget resolution.52
Such a provision, however, could raise constitutional issues under the Twenty-Seventh
Amendment.
On January 23, 2013, the House passed H.R. 325, which suspended the debt limit until May 19,
2013, on a 285-144 vote. 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.
Replenishing the U.S. Treasury’s Extraordinary Measures
Once H.R. 325 was signed into law on February 4, the U.S. Treasury replenished funds that had
been used to meet federal payments, thus resetting its ability to use extraordinary measures. As of
February 1, 2013, the U.S. Treasury had used about $31 billion in extraordinary measures.53
Statutory language that grants the Treasury Secretary the authority to declare a “debt issuance
suspension period” (DISP), which permits certain extraordinary measures, also requires that “the
Secretary of the Treasury shall immediately issue” amounts to replenish those funds once a debt
issuance suspension period (DISP) is over.54 A DISP extends through “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.”55
Shortly after the declaration of a new debt issuance suspension period in February 2013, Jacob
Lew was confirmed as Treasury Secretary, replacing Timothy Geithner.56
Debt Limit Reset and Return of Extraordinary Measures 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.
Some Members, as noted above, stated that H.R. 325 (P.L. 113-3) was intended to prevent the
U.S. Treasury from accumulating cash balances. The U.S. Treasury’s operating cash balances at

52 H.R. 325 (P.L. 113-3) § 3.
53 In the Daily Treasury Statement for February 4, 2013 (http://fms.treas.gov/dts/index.html), Table III-A shows a net
change in Government Account Series of nearly $42 billion. About $31 billion of that amount reflects replenishment of
funds used for extraordinary measures, with the rest reflecting trust fund operations and other activities. Treasury
Assistant Secretary for Financial Markets Matthew Rutherford, in a February 6, 2013, quarterly refunding press
conference mentioned that the U.S. Treasury had replenished those funds (see webcast: http://www.treasury.gov/press-
center/Video-Audio-Webcasts/Pages/Webcasts.aspx).
54 The statutory text (5 U.S.C. § 8348(j)(3)) governing the Civil Service Retirement and Disability Fund (CSRDF)
states that
Upon expiration of the debt issuance suspension period, the Secretary of the Treasury shall
immediately issue to the Fund obligations under chapter 31 of title 31 that ... bear such interest rates
and maturity dates as are necessary to ensure that, after such obligations are issued, the holdings of
the Fund will replicate to the maximum extent practicable the obligations that would then be held
by the Fund if the suspension of investment ... during such period had not occurred.
The statutory text (5 U.S.C. § 8909(c)) governing the Postal Service Retiree Health Benefit Fund (PSRHDF) states that
investments “shall be made in the same manner” as those in the CSRDF.
55 5 U.S.C. § 8348(j)(5)(B).
56 U.S. Treasury, “Jacob J. Lew Confirmed as Secretary of the Treasury,” press release tg-1864,
http://www.treasury.gov/press-center/press-releases/Pages/tg1864.aspx. Deputy Treasury Secretary Neal Wolin served
as Acting Treasury Secretary after Secretary Geithner left the U.S. Treasury in January 2013 until Lew was confirmed.
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the start of May 20, 2013 ($34 billion), were well below balances ($60 billion) at the close of
February 4, 2013, when H.R. 325 was enacted.57 Some experienced analysts had stated that the
exact method by which the debt limit would be computed according to the provisions of P.L. 113-
3 was not fully clear.58 The U.S. Treasury has not provided details of how it computed the debt
limit after the suspension lapsed.
Treasury Secretary Jacob Lew notified Congress on May 20, 2013, that he had declared a new
debt issuance suspension period (DISP), triggering authorities that allow the Treasury Secretary
to use extraordinary measures to meet federal obligations until August 2.59 On August 2, 2013,
Secretary Lew notified Congress that the DISP would be extended to October 11, 2013.60 In those
notifications, as well in other communications, Secretary Lew urged Congress to raise the debt
limit in a “timely fashion.”
Debt Limit Forecasts in 2013
How long the U.S. Treasury could have continued to pay federal obligations absent an increase in
the debt limit depended on economic conditions, which affect tax receipts and spending on some
automatic stabilizer programs, and the pace of federal spending. As noted above, such forecasts
are subject to substantial uncertainty, especially over longer time horizons.61
Stronger federal revenue collections and a slower pace of federal outlays in 2013 reduced the
FY2013 deficit compared to previous years.62 A July 2013 CBO estimate put the total federal
deficit at $606 billion in FY2013, well below the FY2012 deficit of $1,087 billion, implying a
slower overall pace of borrowing.63 Special dividends from mortgage giants Fannie Mae and
Freddie Mac also extended the U.S. Treasury’s ability to meet federal obligations.
In May 2013, the investment bank Goldman Sachs projected that, with the addition of the Fannie
Mae dividend and an estimated postsuspension $16.70 trillion limit, federal borrowing capacity
would be exhausted in early October.64
Fannie Mae and Freddie Mac Dividend Payments to the U.S. Treasury
In September 2008, Fannie Mae and Freddie Mac entered voluntary conservatorship.65 As part of
their separate conservatorship agreements, Treasury agreed to support Fannie Mae and Freddie

57 U.S. Treasury, Daily Treasury Statements for February 4, 2013, and May 20, 2013.
58 Norman Carleton, “The Debt Limit and H.R. 325: The ‘No Budget, No Pay Act of 2013,’” Washington Outside blog,
January 24, 2013, http://washingtonoutside.blogspot.com/2013/01/the-debt-limit-and-hr-325-no-budget-no.html.
59 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, May 20, 2013, http://www.treasury.gov/
initiatives/Documents/Debt%20Limit%20Letter%202%20Boehner%20May%2020%202013.pdf. Secretary Lew was
confirmed on February 27, 2013.
60 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, August 2, 2013, http://www.treasury.gov/
initiatives/Documents/Debt%20Limit%2020130802%20Boehner.pdf.
61 Department of the Treasury, Office of the Inspector General, “Response to Senator Hatch Regarding Debt Limit in
2011,” OIG-CA-12-006, August 24, 2013, enclosure 1, p. 2, http://www.treasury.gov/about/organizational-structure/ig/
Audit%20Reports%20and%20Testimonies/Debt%20Limit%20Response%20%28Final%20with%20Signature%29.pdf.
62 CBO, Monthly Budget Review for July 2013, August 7, 2013, http://www.cbo.gov/publication/44495.
63 CBO, Updated Budget Projections: Fiscal Years 2013 to 2023, May 14, 2013, http://www.cbo.gov/publication/
44172.
64 Excerpted from Alex Phillips, “The Smaller Deficit Should Extend the Next Debt Limit Deadline Slightly,” U.S.
Daily issue brief, Goldman Sachs Global Investment Research, May 3, 2013.
65 See CRS Report R44525, Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions, by Darryl
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Mac in return for senior preferred stock that would pay dividends. Losses for Fannie Mae and
Freddie Mac while in conservatorship have totaled $123 billion, although each has been
profitable since the start of 2012. For a profitable firm, some past losses can offset future tax
liabilities and would be recognized on its balance sheet as a “deferred tax asset” under standard
accounting practices. Fannie Mae and Freddie Mac wrote down the value of their tax assets
because their return to profitability was viewed as unlikely.
The return of Fannie Mae and Freddie Mac to profitability opened the possibility for a reversal of
those writedowns.66 On May 9, 2013, Fannie Mae announced that it would reverse the writedown
of its deferred tax assets.67 The Treasury agreements, as amended, set the dividend payments to a
sweep (i.e., an automatic transfer at the end of a quarter) of Fannie Mae’s and Freddie Mac’s net
worth. Thus a reversal of that writedown of the deferred tax assets triggered a payment of about
$60 billion from Fannie Mae to the U.S. Treasury on June 28, 2013.68 The U.S. Treasury received
$66.3 billion from Fannie Mae and Freddie Mac on that date.69 Fannie Mae stated that it would
pay an additional $10.2 billion in September 2013.70 On August 7, 2013, Freddie Mac announced
that it had not yet decided to write down its deferred tax assets of $28.6 billion.71
Treasury Secretary Lew’s Message to Congress in 2013
In May 2013, Secretary Lew had notified Congress that he expected the U.S. Treasury would be
able to meet federal obligations until at least Labor Day.72 Some private estimates suggested that
the U.S. Treasury, with the assistance of extraordinary measures, would probably be able to meet
federal obligations until mid-October or November 2013.73 By comparison, in 2011, Treasury
Secretary Geithner invoked authority to use extraordinary measures on May 16, 2011, which
helped fund payments until the debt ceiling was raised on August 2, 2011.74

E. Getter.
66 Freddie Mac at the end of 2012 stated that it “will continue to evaluate our conclusion regarding the need” to reverse
its writedown of tax assets. The potential deferred tax assets for Freddie Mac are much smaller than those of Fannie
Mae. See Freddie Mac (Federal Home Loan Mortgage Corporation), 10-K SEC Filing for Year Ending December 31,
2012, filed February 28, 2013.
67 Fannie Mae, “Fannie Mae Reports Pre-Tax Income of $8.1 Billion for First Quarter 2013,” press release, May 9,
2013, http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/q12013_release.pdf.
68 Recognition of that deferred tax asset also raises policy issues unrelated to the debt limit. For an overview of related
issues, see CRS Report R42760, Fannie Mae’s and Freddie Mac’s Financial Status: Frequently Asked Questions, by
N. Eric Weiss (available to congressional clients upon request). Also see Wrightson ICAP, “Fannie Mae’s Deferred
Tax Assets,” Money Market Observer, April 29, 2013.
69 U.S. Department of the Treasury, Daily Treasury Statement for June 28, 2013, Table II.
70 Fannie Mae, “Fannie Mae Reports Net Income of $10.1 Billion and Comprehensive Income of $10.3 Billion for
Second Quarter 2013,” press release, August 8, 2013, http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-
results/2013/q22013_release.pdf.
71 Reuters, “Freddie Mac profit jumps; will pay U.S. Treasury $4.4 bln (update 3),” August 7, 2013,
http://www.reuters.com/article/2013/08/07/usa-freddiemac-results-idUSL1N0G80GK20130807.
72 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, May 17, 2013, http://www.treasury.gov/
initiatives/Documents/Debt%20Limit%205-17-13%20Boehner.pdf.
73 Wrightson ICAP, “Treasury Refunding Preview,” Money Market Observer, July 29, 2013; Alex Phillips, “The
Smaller Deficit Should Extend the Next Debt Limit Deadline Slightly,” U.S. Daily issue brief, Goldman Sachs Global
Investment Research, May 3, 2013; Citi Research, “U.S. Political Risk Autumn Budget Battles and the Next Fed Chair
Outlook,” research brief, August 5, 2013.
74 Because the debt issuance suspension period included June 30, 2013, the U.S. Treasury gained additional headroom
due to the maturation of certain Civil Service Disability and Retirement Fund (CSRDF) securities. For details on
CSRDF and debt limit extraordinary measures, see GAO, Debt Limit: Analysis of 2011-2012 Actions Taken and Effect
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On August 26, 2013, Treasury Secretary Lew notified congressional leaders that the government
would exhaust its ability to borrow in mid-October according to U.S. Treasury projections. At that
point, the U.S. Treasury would have only an estimated $50 billion in cash to meet federal
obligations.75 With that cash and incoming receipts, the U.S. Treasury would be able to meet
obligations for some weeks after mid-October according to independent analysts, although
projecting when cash balances would be exhausted is difficult.76
On September 25, 2013, Secretary Lew sent another letter to Congress with updated forecasts of
the U.S. Treasury’s fiscal situation.77 According to those forecasts, the U.S. Treasury would
exhaust its borrowing capacity no later than October 17. At that point, the U.S. Treasury would
have about $30 billion in cash balances on hand to meet federal obligations. At the close of
business on October 8, 2013, the U.S. Treasury had an operating cash balance of $35 billion.78
On October 3, 2013, the U.S. Treasury issued a brief outlining potential macroeconomic effects of
the prospect that the federal government would be unable to pay its obligations in a timely
fashion.79 The brief provided data on how various measures of economic confidence, asset prices,
and market volatility responded to the debt limit episode in the summer of 2011.
When Might the Debt Limit Have Been Binding?
In the absence of a debt limit increase, the cash balances on hand when the U.S. Treasury’s
borrowing capacity ran out would then dwindle. At the close of business on October 11, 2013, the
U.S. Treasury’s cash balance was $35 billion.80 Those low cash balances, however, could have
raised two complications even before that point.
First, low cash balances could have complicated federal debt management and Treasury auctions
in late October or early November.81 Yields for Treasury bills maturing after the October 17 date
mentioned in Secretary Lew’s September 25 letter have increased relative to other yields on other
Treasury securities. This appeared to signal reluctance among some investors to hold Treasury
securities that might be affected by debt limit complications.

of Delayed Increase on Borrowing Costs, GAO-12-701, July 2012, http://www.gao.gov/products/GAO-12-701.
75 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, August 26, 2013, http://www.treasury.gov/
initiatives/Documents/082613%20Debt%20Limit%20Letter%20to%20Congress.pdf.
76 For example, Goldman Sachs had predicted that the U.S. Treasury would run out of cash around November 1, 2013.
See Alex Phillips, “The US Fiscal Debate: Headline Risks to the Downside, Fiscal Risks to the Upside,” Goldman
Sachs U.S. Daily, September 19, 2013. Also see CBO, “Federal Debt and the Statutory Limit, September 2013,”
September 25, 2013, http://www.cbo.gov/publication/44608. CBO estimated that without an increase in the debt limit,
the U.S. Treasury would exhaust its cash balances between October 22 and October 31, although that time frame was
subject to uncertainty due to variations in federal outlays and receipts.
77 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, September 25, 2013,
http://www.treasury.gov/Documents/Debt%20Limit%2020130925%20Boehner.pdf.
78 U.S. Department of the Treasury, Daily Treasury Statement, Table I, October 8, 2013, https://fms.treas.gov/fmsweb/
viewDTSFiles?dir=a&fname=13100800.pdf.
79 U.S. Department of the Treasury, The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship,” October 3,
2013, http://www.treasury.gov/initiatives/Documents/
POTENTIAL%20MACROECONOMIC%20IMPACT%20OF%20DEBT%20CEILING%20BRINKMANSHIP.pdf.
80 Daily Treasury Statement, October 11, 2013, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&fname=
13101100.pdf.
81 Wrightson ICAP, “Summer Break Issue,” Money Market Observer, September 2, 2013.
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Second, repo lending, which relies heavily on Treasury securities for collateral, could become
more expensive or could be disrupted.82 Repo lending rates rose sharply in early August 2011
during the 2011 debt limit episode, but fell to previous levels once that episode was resolved.83
Market Reaction to the Impending Exhaustion of Treasury’s Borrowing
Capacity in October 2013
In the past, some financial markets have reacted to impending debt limit deadlines, signaling
concerns about the federal government’s ability to meet obligations in a timely manner. In early
October 2013, the U.S. Treasury issued a brief that outlined how various measures of economic
confidence, asset prices, and market volatility responded to the debt limit episode in the summer
of 2011, and the prospect that the federal government might not have been able to pay its
obligations in a timely fashion.84
Some investors expressed reluctance to hold Treasury securities that might be affected by debt
limit complications. Fidelity Investments, J.P. Morgan Investment Management Inc., and certain
other funds stated in October 2013 that they had sold holdings of Treasury securities scheduled to
mature or to have coupon payments between October 16 and November 6, 2013.85
In October 2013, yields for Treasury bills maturing in the weeks after October 17—when the U.S.
Treasury’s borrowing capacity was projected to be exhausted—rose sharply relative to yields on
Treasury securities maturing in 2014. Figure 1 shows secondary market yields on Treasury bills
set to mature after the projected date when the Treasury’s borrowing capacity would be
exhausted.86 The horizontal axis shows days before the end of the DISP, and the vertical scale
shows basis points (bps). For instance, the yield for the Treasury bill maturing October 24, 2013,
rose from close to zero to 46 bps on October 15, 2013. Those yields are about 10 times larger than
for similar bills that matured in calendar year 2014.87 A four-week Treasury bill auctioned on
October 8, 2013, sold with a yield of 35 bps. By contrast, a four-week bill sold on September 4,
2013, sold with a yield of 2 bps.88 After enactment of a debt limit measure (H.R. 2775; P.L. 113-
46) on October 16, 2013, however, those yields returned to their previous levels.

82 “Repo” is short for repurchase agreement. For background, see Tobias Adrian et al., “Repo and Securities Lending,”
Federal Reserve of New York Staff Report No. 529, revised version February 2013, http://www.newyorkfed.org/
research/staff_reports/sr529.pdf.
83 RBC Capital Markets, U.S. Economics and Rates Focus, September 25, 2013.
84 U.S. Department of the Treasury, The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship,” October 3,
2013, http://www.treasury.gov/initiatives/Documents/
POTENTIAL%20MACROECONOMIC%20IMPACT%20OF%20DEBT%20CEILING%20BRINKMANSHIP.pdf.
85 J.P. Morgan, “J.P. Morgan Takes Action in Light of Possible U.S. Government Default, October 10, 2013,
http://www.jpmgloballiquidity.com/blobcontent/62/379/1323366810685_Statment_US_Web_Govt_Default_10-10-
13.pdf; Fidelity Investments, “Fidelity Investments Statement on Money Market Mutual Funds,” October 2013,
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/MM-MF-Statement_Oct-2013.pdf; Ken
Sweet, “Short-term Funds Show Stress as Default Looms,” Associated Press, October 9, 2013, http://money.msn.com/
business-news/article.aspx?feed=AP&date=20131009&id=16982865.
86 Those dates are August 2, 2011, and October 17, 2013.
87 For current Treasury securities quotes, see the Wall Street Journal quote website: http://online.wsj.com/mdc/public/
page/2_3020-treasury.html?mod=topnav_2_3010#treasuryB.
88 See Treasury auction results announcement, October 8, 2013, http://www.treasurydirect.gov/instit/annceresult/press/
preanre/2013/R_20131008_1.pdf; and for September 4, 2013, https://www.treasurydirect.gov/instit/annceresult/press/
preanre/2013/R_20130904_1.pdf.
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Figure 1. Yields on Selected Treasury Bills that Mature After Projected Date of
Exhaustion of Borrowing Capacity

Source: Bloomberg and Nomura Holdings. Excerpted from Jens Nordvig and Ankit Sahni, Seeing Through the
Shutdown, Nomura FX Insights, October 1, 2013; update by Ankit Sahni.
Notes: The 13-week Treasury bil (cusip 912796BG3) matures October 24, 2013. The Treasury bil maturing
December 5, 2013, has cusip 912796BN8. A Treasury bil with cusip 9127953B5 matured on August 4, 2011.
Debt Limit Issues in 2013
Congressional consideration of federal debt policy raised several policy issues that were explored
in hearings and in broader policy discussions.
Hearings in 2013
On January 22, 2013, the House Ways and Means Committee held hearings on the history of the
debt limit and how past Congresses and Presidents have negotiated changes in the debt limit.89 On
April 10, 2013, the House Ways and Means Subcommittee on Oversight held hearings on federal
debt and fiscal management when the debt limit binds.90 The Joint Economic Committee held
hearings on the economic costs of uncertainty linked to the debt limit on September 18, 2013.91

89 U.S. Congress, House Committee on Ways and Means, The Statutory Debt Limit, 113th Cong., 1st sess., January 22,
2013, https://waysandmeans.house.gov/camp-opening-statement-hearing-on-the-debt-limit/.
90 U.S. Congress, House Committee on Ways and Means, Subcommittee on Oversight, Examining the Government’s
Ability to Continue Operations When at the Statutory Debt Limit, 113th Cong., 1st sess., April 10, 2013.
91 U.S. Congress, Joint Economic Committee, The Economic Costs of Debt-Ceiling Brinksmanship, 113th Cong., 1st
sess., September 18, 2013, https://www.jec.senate.gov/public/index.cfm/2013/9/jec-hearing-the-economic-costs-of-
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On October 10, 2013, the Senate Finance Committee held hearings on the debt limit and heard
testimony from Treasury Secretary Jacob Lew.92 On the same morning, the Senate Banking
Committee held hearings on the effects of a possible federal default on financial stability and
economic growth, and heard testimony from heads of financial industry trade associations.93
Debt Prioritization and H.R. 807
On April 30, 2013, the House Ways and Means Committee reported H.R. 807, which would grant
the Treasury Secretary the authority to borrow to fund principal and interest payments on debt
held by the public and the Social Security trust funds if the debt limit were reached.94 The
Treasury Secretary would also have had to submit weekly reports to Congress after that authority
were exercised. On May 9, 2013, the House passed an amended version of H.R. 807.95 The House
also passed a version of H.J.Res. 59 that incorporated the text of H.R. 807 on September 20. On
September 27, the Senate passed an amended version of the measure that did not contain
provisions from H.R. 807. The Obama Administration indicated that it would veto H.R. 807 or
H.J.Res. 59 containing similar provisions, were either to be approved by Congress.96 The October
2013 debt limit measure (H.R. 2775; P.L. 113-46) contained no payment prioritization provisions.
H.R. 807 would have affected one aspect of the U.S. Treasury’s financial management of the
Social Security program, but would not alter other aspects. If the debt limit were reached, the
U.S. Treasury could still face constraints that could raise challenges in financial management. The
U.S. Treasury is responsible for (1) making Social Security beneficiary payments; (2) reinvesting
Social Security payroll taxes and retirement contributions in special Treasury securities held by
the Social Security trust fund; and (3) paying interest to the Social Security trust funds, in the
form of special Treasury securities, at the end of June and December.97 Those special Treasury
securities, either funded via Social Security payroll receipts or biannual interest payments, are
subject to the debt limit. Thus, sufficient headroom under the debt limit is needed to issue those
special Treasury securities. If the debt limit were reached and extraordinary measures were
exhausted, the Treasury Secretary’s legal requirement to reinvest Social Security receipts by
issuing special Treasury securities could at times be difficult to reconcile with the legal
requirement not to exceed the statutory debt limit.

debt-ceiling-brinkmanship.
92 U.S. Congress, Senate Committee on Finance, The Debt Limit, hearings, 113th Cong., 1st sess., October 10, 2013,
http://www.finance.senate.gov/hearings/hearing/?id=cb3ca699-5056-a032-52fb-9f23396c3f7c.
93 U.S. Congress, Senate Committee on Banking, Impact of a Default on Financial Stability and Economic Growth,
hearings, 113th Cong., 1st sess., October 10, 2013, materials available at http://www.banking.senate.gov/public/
index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=0c33e3f3-65cd-44f1-95b9-8a433ad1554c.
94 The Old-Age and Survivors Insurance Trust Fund (OASI) and the Disability Insurance Trust Fund (DI) are the two
Social Security trust funds.
95 The amendment, offered by Representative Camp, added a prohibition on funding Member compensation through
borrowing enabled by the measure. Treasury reporting requirements were also clarified.
96 OMB, Statement of Administration Policy, H.R. 807 Full Faith and Credit Act, May 7, 2013,
https://obamawhitehouse.archives.gov/sites/default/files/omb/legislative/sap/113/saphr807r_20130507.pdf; OMB,
Statement of Administration Policy, H.J.Res. 59 Continuing Appropriations Resolution, 2014, September 19, 2013,
https://obamawhitehouse.archives.gov/sites/default/files/omb/legislative/sap/113/saphjr59h_20130919.pdf.
97 See CRS Report RS20607, Social Security: Trust Fund Investment Practices, by Dawn Nuschler (available to
congressional clients on request). Social Security investment policy is governed by Section 201 of the Social Security
Act (42 U.S.C. 401, http://www.ssa.gov/OP_Home/ssact/title02/0201.htm).
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Resolution of the Debt Limit Issue in October 2013
On September 25, Treasury Secretary Lew notified Congress that the government would exhaust
its borrowing capacity around October 17 according to updated estimates. At that point, the U.S.
Treasury would have had a projected cash balance of only $30 billion to meet federal obligations.
On October 16, 2013, Congress passed a continuing resolution (Continuing Appropriations Act,
2014; H.R. 2775; P.L. 113-46) that included a provision to allow a suspension of the debt limit.
That measure passed the Senate on an 81-18 vote.98 The House then passed the measure on a 285-
144 vote. The President signed the bill (P.L. 113-46) early the next morning. 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.99 The President
sent congressional leaders a certification on October 17, 2013, to trigger a suspension of the debt
limit through February 7, 2014.100
That suspension, however, was subject to a congressional resolution of disapproval. If a
resolution of disapproval had been enacted, the debt limit suspension would end on that date.
Specific expedited procedures in each chamber governed the consideration of the resolution of
disapproval. The resolution, if passed, was subject to veto. A resolution of disapproval (H.J.Res.
99) was passed in the House on October 20, 2013, on a 222-191 vote. A similar measure, S.J.Res.
26, was not approved by the Senate, so the debt limit increase was not blocked.101
The debt limit suspension ended on February 7, and a limit was set to reflect the amount of debt
necessary to fund government operations before the end of the suspension. The U.S. Treasury was
precluded in P.L. 113-46 from accumulating excess cash reserves that might have allowed an
extension of extraordinary measures.
The debt limit provisions enacted in October 2013 resemble provisions enacted in 2011 and
earlier in 2013. For example, the Budget Control Act of 2011 (P.L. 112-25) also provided for a
congressional resolution of disapproval of a debt limit increase. The suspension of the debt limit
in H.R. 2775 resembles the suspension enacted in February 2013 (H.R. 325; P.L. 113-3).102
Other Proposals Regarding the Debt Limit in October 2013
Passage of the Continuing Appropriations Act, 2014 was preceded by other proposals to modify
the debt limit. On October 8, 2013, Senate Majority Leader Reid introduced S. 1569, a measure
intended to ensure complete and timely payment of federal obligations. The measure would have
extended the suspension of the debt limit enacted in February 2013 (P.L. 113-3). On October 15,
2013, an announcement of a hearing on a proposal to amend the Senate amendment to H.J.Res.
59 appeared on the House Rules Committee website. That hearing, according to a subsequent
announcement, was postponed that evening. The measure would have extended the debt limit
through February 15, 2014, and restricted the Treasury Secretary’s ability to employ

98 The original version of H.R. 2775, entitled the “No Subsidies Without Verification Act,” passed the House on
September 12, 2013, on a 235-191 vote.
99 The debt limit provisions are included as Section 1002 of P.L. 113-46, entitled the “Default Prevention Act of 2013.”
100 The provision required that the presidential certification be issued within three days of enactment.
101 A motion to proceed on S.J.Res. 26 was rejected on October 29, 2014, by a 45–54 vote.
102 A discussion of that measure is below.
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extraordinary measures through April 15, 2014. The measure would also have extended
discretionary funding at “sequester levels” through December 15, 2013.103
The Debt Limit in 2014
The resolution of the debt limit episode and the ending of the federal shutdown in October 2013
set up a subsequent episode in early 2014.
Debt Limit Forecasts in Late 2013 and 2014
In late November 2013, CBO issued an analysis of Treasury cash flows and available
extraordinary measures.104 Treasury, according to those estimates, might exhaust its ability to
meet federal obligations in March. Because Treasury cash flows can be highly uncertain during
tax refund season, CBO stated that that date could arrive as soon as February 2014 or as late as
early June.
Goldman Sachs had estimated that Treasury would probably exhaust its headroom—the sum of
projected cash balances and remaining borrowing authority under the debt limit—in mid to late
March, but might in fortuitous circumstances be able to meet its obligations until June.105 While
Goldman Sachs and other independent forecasters noted that the U.S. Treasury might possibly
avoid running out of headroom in late March or early April, waiting until mid-March to address
the debt limit could have raised serious risks for the U.S. government’s financial situation.106
Treasury Secretary Lew Notifies Congress in Early 2014
As the end of the debt limit suspension neared, the U.S. Treasury continued to warn Congress of
the consequences on not raising the debt limit. While the Treasury could again employ
extraordinary measures after the suspension ended after February 7, 2014, its ability to continue
meeting federal obligations would be limited by large outflows of cash resulting from individual
income tax refunds. In December 2013, the U.S. Treasury had notified congressional leaders that
according to its estimates, extraordinary measures would extend its borrowing authority “only
until late February or early March 2014.”107 On January 22, 2014, Secretary Lew called for an
increase in the debt limit before the end of debt limit suspension on February 7, 2014, or the end
of February.108 In the first week of February 2014, Secretary Lew stated that the U.S. Treasury
could not be certain that extraordinary measures would last beyond February 27, 2014.109

103 House Rules Committee, “House Amendment to Senate Amendment to H.J.Res. 59 Offered by Mr. Rogers of
Kentucky,” October 15, 2013, http://docs.house.gov/billsthisweek/20131014/BILLS-113hjres59-HAmdt2a.pdf.
104 CBO, “Federal Debt and the Statutory Limit,” November 20, 2013, http://www.cbo.gov/publication/44877.
105 Alex Phillips, “Q&A on the Debt Limit,” Goldman Sachs US Daily, January 23, 2014.
106 Treasury’s headroom increases sharply in mid-June in large part due to corporate income tax receipts. Federal
corporate estimated income tax payments are due on the 15th day of the fourth, sixth, ninth, and twelfth months of the
corporation’s tax year. See the IRS tax calendar at http://www.irs.gov/publications/p509/
ar02.html#en_US_2014_publink100034257.
107 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, December 19, 2013,
http://www.treasury.gov/initiatives/Documents/12-19-2013%20Debt%20Limit%20Letter%20FINAL%20Boehner.pdf.
108 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, January 22, 2014,
http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20to%20Congress%201-22-2014.pdf.
109 U.S. Treasury, “Remarks of Secretary Jacob J. Lew at the Bipartisan Policy Center,” February 3, 2014,
http://www.treasury.gov/press-center/press-releases/Pages/jl2276.aspx; Treasury Secretary Jacob Lew, letter to House
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Debt Limit Suspension Lapses in February 2014
On February 7, 2014, the debt limit suspension ended and the U.S. Treasury reset the debt limit to
$17,212 billion.110 On the same day, the U.S. Treasury also suspended sales of State and Local
Government Series securities (SLGS), the first of its extraordinary measures.111 SLGS are used by
State and local governments use SLGS as one way to comply with IRS anti-arbitrage rules.112
On February 10, Secretary Lew notified Congress that he had declared a debt issuance suspension
period (DISP) that authorized use of other extraordinary measures. The DISP was scheduled to
last until February 27.113
Debt Limit Again Suspended Until March 2015
Following the lapse of the debt limit suspension, Congress moved quickly to address the debt
limit issue. On February 10, 2014, the House Rules Committee posted an amended version of S.
540 that would suspend the debt limit through March 15, 2015. The debt limit would be raised the
following day by an amount tied to the amount of borrowing required by federal obligations
during the suspension period. The U.S. Treasury would also be prohibited from creating a cash
reserve above that level. The measure also would have reversed a 1% reduction in the cost-of-
living adjustment for certain working-age military retirees that had been included in the
Bipartisan Budget Act of 2013 (BBA; P.L. 113-67).114 In addition, sequestration of nonexempt
mandatory spending would be extended from FY2023 to FY2024. CBO issued a cost estimate of
the measure on February 11, 2014.115
On February 11, 2014, the House voted 221-201 to suspend the debt limit (S. 540) through March
15, 2015. The amended measure included restrictions on Treasury debt management in the
version reported by the Rules Committee, but omitted provisions to reverse reductions in cost-of-
living adjustments to working-age military retiree pensions and an extension of nondefense
mandatory sequestration.116 The Senate voted to concur in the House amendment the following

Speaker John A. Boehner, February 7, 2014, http://www.treasury.gov/initiatives/Documents/
Debt%20Limit%20Letter%20020714.pdf.
110 U.S. Treasury, Daily Treasury Statement, February 10, 2014, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&
fname=14021000.pdf.
111 U.S. Treasury, “Treasury Assistant Secretary for Financial Markets Matthew Rutherford February 2014 Quarterly
Refunding Statement,” February 5, 2014, http://www.treasury.gov/press-center/press-releases/Pages/jl2281.aspx. See
also U.S. Treasury, “Treasury Suspends Sales of State and Local Government Series Securities,” February 4, 2014,
http://treasurydirect.gov/news/pressroom/pressroom_1401slgsoff.htm. For information on these securities, see CRS
Report R41811, State and Local Government Series (SLGS) Treasury Debt: A Description, by Grant A. Driessen and
Jeffrey M. Stupak.
112 CRS Report R41811, State and Local Government Series (SLGS) Treasury Debt: A Description, by Grant A.
Driessen and Jeffrey M. Stupak.
113 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, February 10, 2014,
http://www.treasury.gov/initiatives/Documents/02102014%20CSRDF%20G%20Fund%20Letter.pdf.
114 For details on military retirement changes in the Bipartisan Budget Act and Consolidated Appropriations Act, 2014,
see CRS Report RL34751, Military Retirement: Background and Recent Developments, by Kristy N. Kamarck.
115 CBO, S. 540, Temporary Debt Limit Extension Act, February 11, 2014, http://www.cbo.gov/publication/45101.
CBO estimated that the measure would increase mandatory spending by at least $5 billion in the decades after FY2024.
116 On February 11, 2014, the House also passed a separate measure (S. 25, P.L. 113-82) that ensured that reduced
annual cost-of-living adjustment to the retired pay of working-age military retirees required by the Bipartisan Budget
Act would not apply to those who joined the Armed Forces before January 1, 2014. That measure was passed on a 326-
90 vote. The Senate agreed to the House changes on a 95-3 vote on the next day. The President signed the bill into law
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day on a 55-43 vote. The President signed the measure (P.L. 113-83) on February 15, 2014.
Unlike previous measures that suspended the debt limit, a presidential certification was not
required. A separate measure was also signed into law on the same day (P.L. 113-82) to reverse
reductions in cost-of-living adjustments to working-age military retiree pensions for those who
entered the military before the beginning of 2014.
The Debt Limit in 2015
The debt limit, which had been suspended through March 15, 2015, was reestablished the
following day at $18,113 billion. The debt limit was raised, in essence, by the sum of payments
made during the suspension period to meet federal obligations.117
Treasury’s Extraordinary Measures in 2015
Treasury Secretary Lew sent congressional leaders a letter on March 6, 2015, stating that
Treasury would suspend issuance of SLGS bonds on March 13, 2015, the last business day during
the current debt limit suspension.
Once the most recent debt limit suspension lapsed, Treasury Secretary Lew declared a Debt
Issuance Suspension Period (DISP) on March 16, 2015, which empowered him to use
extraordinary measures to meet federal fiscal obligations until July 30, 2015.118 On July 30, 2015,
Treasury Secretary Lew sent congressional leaders a letter to invoke extraordinary powers again
until the end of October.119 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.120 Secretary Lew sent
another letter on September 10, 2015, that reiterated those points.121

on February 15, 2014.
117 P.L. 113-83 directed that the limit be increased “to the extent that (1) the face amount of obligations issued under
chapter 31 of such title and the face amount of obligations whose principal and interest are guaranteed by the United
States Government (except guaranteed obligations held by the Secretary of the Treasury) outstanding on March 16,
2015, exceeds (2) the face amount of such obligations outstanding on the date of the enactment of this Act. The law
included a separate provision prohibiting the U.S. Treasury from increasing its cash balances above normal levels
during the debt limit suspension.”
118 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, March 16, 2015, http://www.treasury.gov/
initiatives/Documents/Treasury%20Letter%20to%20Congress%20031615.pdf. That letter invoked extraordinary
measures related to the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health
Benefits Fund (PSRDBF). Secretary Lew sent a separate letter to Congress to invoke authorities related to the Thrift
Savings Plan (TSP) G Fund, http://www.treasury.gov/press-center/media-advisories/Documents/
Treasury%20Letter%20to%20Congress%20031715.pdf.
119 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.
120 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.
121 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress,
September 10, 2015, http://www.treasury.gov/Documents/Treasury%20Letter%20to%20Congress%20091015.pdf.
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Cash Management Changes
In May 2015, the U.S. Treasury changed its cash management policy to adopt recommendations
of the Treasury Borrowing Advisory Committee and an internal review.122 The new policy is
intended to ensure that the U.S. Treasury could continue to meet federal obligations even if its
market access were disrupted for a week or so. In normal circumstances that would require cash
balances not less than approximately $150 billion. Treasury Secretary Lew noted that an event of
the scale such as “Hurricane Sandy, September 11, or a potential cyber-attack disruption” might
cause a lapse in market access.123 The new cash management policy per se does not affect the date
when the debt limit might constrain the U.S. Treasury’s ability to meet federal obligations.124
During a November 2, 2016, meeting between Treasury officials and a panel of financiers,
concerns were raised that the interaction of debt limit constraints in 2017 with changes in the
structure of money market funds (MMFs) that have increased demand for Treasury bills could
risk disruption of short-term funding markets.125
If Treasury reduced its cash balances rapidly by buying back Treasury securities, the reduction in
the supply of Treasuries could affect fixed income markets and could work at cross purposes with
Federal Reserve monetary policy operations.
How Long Would Have Extraordinary Measures Lasted in 2015?
On October 15, 2015, Secretary Lew stated that extraordinary measures would have been
exhausted “no later than” November 3, 2015, although a relatively small cash reserve—projected
at less than $30 billion—would be on hand.126 Secretary Lew had previously stated that
extraordinary measures would be exhausted about November 5, 2015.127
Independent forecasts of when extraordinary measures would be exhausted were close to the date
estimated by the U.S. Treasury. One private forecast estimated Treasury’s headroom under the
debt limit at $38 billion on November 5, 2015.128 CBO, according to an October 14, 2015, report,
projected that “Treasury will begin running a very low cash balance in early November, and the
extraordinary measures will be exhausted and the cash balance entirely depleted sometime during
the first half of November.”129 Figure 2 shows one recent independent estimate of Treasury’s

122 U.S. Treasury, “Minutes of the Meeting of the Treasury Borrowing Advisory Committee of the Securities Industry
and Financial Markets Association,” May 6, 2015, http://www.treasury.gov/press-center/press-releases/Pages/
jl10043.aspx.
123 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress,
September 10, 2015, http://www.treasury.gov/Documents/Treasury%20Letter%20to%20Congress%20091015.pdf.
124 High cash balances in 2022, relative to pre-pandemic levels, may complicate estimation of when Treasury would
need to invoke extraordinary measures.
125 U.S. Treasury, “Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee of the
Securities Industry and Financial Markets Association,” November 2, 2016, https://www.treasury.gov/press-center/
press-releases/Pages/jl0715.aspx. For a description of MMF reforms, see Securities and Exchange Commission, “SEC
Adopts Money Market Fund Reform Rules: Rules Provide Structural and Operational Reform to Address Run Risks in
Money Market Funds,” press release 2014-143, July 23, 2014, https://www.sec.gov/News/PressRelease/Detail/
PressRelease/1370542347679.
126 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress, October
15, 2015, http://www.treasury.gov/connect/blog/Pages/October-2015-Debt-Limit-Letter.aspx.
127 Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress, October
1, 2015, http://www.treasury.gov/Documents/Treasury%20Letter%20to%20Congress%20100115.pdf.
128 Wrightson ICAP, The Money Market Observer, “Debt Ceiling Update,” October 12, 2015.
129 CBO, Federal Debt and the Statutory Limit, October 14, 2015, https://www.cbo.gov/publication/50888.
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headroom that shows Treasury’s available resources falling below $50 billion after the first few
days of November 2015.
Figure 2. Projection of U.S. Treasury Headroom Under Debt Limit in 2015
Estimated Level of Treasury Cash and Borrowing Authority, July 1 to November 16, 2015, in $Billions

Source: Lou Crandall, Wrightson ICAP, October 12, 2015.
Notes: Intra-monthly borrowing authority partially interpolated for July through September 2015. Levels after
October 8, 2015, were projected.
Why Did the Estimated Date of Treasury’s Exhaustion of Borrowing Capacity
Move Up?
Previous independent estimates of when Treasury’s borrowing capacity would be exhausted
suggested that leaving the debt limit at its present level would suffice until the end of November
or even early December. For example, CBO’s August 2015 projections had put the estimated date
of exhaustion somewhere between mid-November and early December 2015.130
Lower than expected tax receipts during the fall of 2015 and higher than expected federal trust
fund investments pushed the date back from what outside forecasters had expected earlier in the
year. For example, net issuance of Government Account Series securities—which includes special
Treasury securities held by federal trust funds—was about $10 billion higher on the first day of
FY2016 as compared to the first day of FY2015.131 On October 9, 2015, the U.S. Treasury issued
a summary of debt balances to provide a more detailed view of its headroom under the debt
limit.132 That summary showed that Treasury had used $355 billion of its available $369 billion in
extraordinary measures as of October 7, 2015, leaving $14 billion to meet upcoming obligations.

130 CBO, Federal Debt and the Statutory Limit,” August 2015, https://www.cbo.gov/sites/default/files/114th-congress-
2015-2016/reports/50739-FederalDebt.pdf.
131 U.S. Treasury, Daily Treasury Statement, October 1, 2014 and October 1, 2015, https://www.fms.treas.gov/dts/
index.html. Net issuance of Government Account Series on the first day of FY2015 was $54.7 billion, and $64.6 billion
on the first day of FY2016.
132 U.S. Treasury, “Daily Debt Subject to Limit Activity: October 2015,” October 9, 2015, http://www.treasury.gov/
connect/blog/Documents/
Debt%20Activity%20and%20DSL%20Summary%20combined%20for%20distribution%2010_09_2015.pdf.
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Secretary Lew noted in previous correspondence with Congress that projections of Treasury’s
ability to meet federal obligations were subject to significant uncertainty due to the variability of
federal tax collections and expenditure patterns. While the U.S. Treasury’s payment calendar, tax
due dates, and securities auction schedule are generally regular and predictable, the amounts paid
or received on a given day can fluctuate substantially.
Bipartisan Budget Act of 2015 and the Resolution of the 2015 Debt
Limit Episode
Late on the night of October 26, 2015, text of the Bipartisan Budget Agreement of 2015 was
issued. The proposal included a provision to suspend the debt limit until March 15, 2017. The
debt limit would then come back into effect on the following day at a level reflecting the payment
of federal obligations incurred during the suspension period. As with previous debt limit
suspensions, the measure prohibited the U.S. Treasury from creating a cash reserve beyond
amounts necessary to meet federal obligations during the suspension period. The Bipartisan
Budget Act of 2015 would also increase statutory caps on discretionary spending for FY2016 and
FY2017, along with measures aimed at offsetting those increases.
On October 27, 2015, the House Rules Committee provided a summary of its provisions and put
forth an amendment aimed at addressing certain scoring issues.133 The following day, the House
concurred with a modified version of the Senate amendments to H.R. 1314 on a 266-167 vote.
The Senate concurred with that version on October 30, 2015, on a 64-35 vote, sending the
measure to the President, who signed it (P.L. 114-74) on November 2, 2015,134 thus resolving the
2015 debt limit episode by suspending the debt limit until March 15, 2017.
Other Developments in 2015 and 2016
On September 10, 2015, the House Ways and Means Committee reported H.R. 692, which would
have granted the Treasury Secretary the authority to borrow to fund principal and interest
payments on debt held by the public.135 The measure resembles H.R. 807, which was considered
in 2013 and is discussed above. The House passed H.R. 692 on October 21, 2015, by a 235-194
vote. The House Ways and Means Committee also reported H.R. 3442 on the same date, which
would have required the Treasury Secretary to appear before the House Committee on Ways and
Means and the Senate Committee on Finance during a debt limit episode and to submit a report
on the federal debt.136

133 The measure, previously titled as the “Trade Act of 2015,” had previously been passed in different versions by the
House and Senate. The House approved H.R. 1314 by a voice vote on April 14, 2015. The Senate approved the
measure on a 62-37 vote on May 22, 2015. The amendment eliminated a “not less than” clause in the section setting
war funding (OCO/GWOT) levels for FY2016 and FY21017, and changed rates and amounts for many other
provisions. OCO stands for Overseas Contingency Operations and GWOT stands for Global War on Terror.
134 White House Office of the Press Secretary, “Remarks by the President at Signing of the Budget Act of 2015,”
November 2, 2015, https://www.whitehouse.gov/the-press-office/2015/11/02/remarks-president-signing-budget-act-
2015.
135 Representative McClintock had introduced H.R. 692 on February 3, 2015. See also H.Rept. 114-265, Default
Prevention Act, September 18, 2015, http://www.gpo.gov/fdsys/pkg/CRPT-114hrpt265/pdf/CRPT-114hrpt265.pdf.
136 Representative Marchant introduced H.R. 3442 on September 8, 2015.
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The U.S. Treasury submitted two reports to Congress on extraordinary measures used during the
2015 debt limit episode. The first described actions affecting the G Fund137 and the second
described actions taken affecting the Civil Service Retirement and Disability Fund.138
Developments in 2017 and 2018
On March 7, 2017, CBO estimated that extraordinary measures could suffice to meet federal
obligations until sometime in the fall of 2017.139 Such estimates are subject to substantial
uncertainty due to changes in economic conditions, federal revenue flows, changes in the
amounts and timing of federal payments, and other factors. On March 8, 2017, Treasury Secretary
Mnuchin notified Congress that he would invoke authorities to use extraordinary measures after
March 15, 2017.140 On March 16, 2017, Secretary Mnuchin notified congressional leaders that he
had exercised those authorities.141 The debt limit on that date was reset at $19,809 billion.142
Administration Officials Urge Congress to Act
In testimony before Congress on May 24, 2017, Administration officials urged Congress to raise
the debt limit before its summer recess.143 Office of Management and Budget (OMB) Director
Mick Mulvaney stated that the federal receipts were coming in more slowly than projected, which
could imply that Treasury’s capacity to meet federal obligations could be exhausted sooner than
previously projected.144 A Goldman Sachs analysis found, however, that some major categories of
tax receipts had shown stronger growth.145

137 U.S. Treasury, Report on the Operation and Status of the Government Securities Investment Fund March 17, 2015
to November 3, 2015 Pursuant to 5 U.S.C. § 8438(h), letter to Speaker Paul Ryan and other congressional leaders,
December 1, 2015, https://www.treasury.gov/initiatives/Documents/
Report%20to%20Congress%20on%20the%20Operation%20and%20Status%20of%20the%20G%20Fund%2012-08-
2015.pdf.
138 U.S. Treasury, Report on Fund Operations and Status From March16, 2015,to December 31, 2015 Pursuant to 5
U.S.C. § 8348(l)(1), letter to Speaker Paul Ryan and other congressional leaders, January 29, 2016,
https://www.treasury.gov/initiatives/Documents/Report%20to%20Congress%20CSRDF%2001292016.pdf.
139 U.S. Congressional Budget Office (CBO), Federal Debt and the Statutory Limit, March 2017, March 7, 2017,
https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52465-federaldebtlimit.pdf.
140 Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated March 8, 2017,
https://www.treasury.gov/initiatives/Documents/DL_SLGS_20170308_Ryan.pdf.
141 Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated March 16, 2017,
https://www.treasury.gov/initiatives/Documents/DL_Letter_20170316_Ryan.pdf. The Treasury’s description of
extraordinary measures is available at https://www.treasury.gov/initiatives/Documents/
Description_of_Extraordinary_Measures_2017_03_16.pdf.
142 U.S. Treasury, Daily Treasury Statement, March 16, 2017.
143 Testimony of Steven T. Mnuchin, Treasury Secretary, in Congress, House Committee on Ways and Means, The
President’s Fiscal Year 2018 Budget Proposals, 115th Cong., 1st sess., May 24, 2017. See
https://www.washingtonpost.com/video/national/mnuchin-to-congress-i-urge-you-to-raise-the-debt-limit/2017/05/24/
19dd29b0-40b5-11e7-b29f-f40ffced2ddb_video.html.
144 Testimony of Mick Mulvaney, OMB Director, in Congress, House Committee on the Budget, The President’s
Fiscal Year 2018 Budget Proposals, 115th Cong., 1st sess., May 24, 2017. See Damian Paletta and Max Ehrenfreund,
“Trump Administration Warns Tax Receipts are Coming in Slowly, Government Could Run Out of Cash Sooner than
Expected,” Washington Post, May 24, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/05/24/trump-
administration-warns-tax-receipts-are-coming-in-slowly-government-could-run-out-of-cash-sooner-than-expected.
145 Alex Phillips, “The Debt Limit and Tax Receipts: Mixed Signals,” Goldman Sachs U.S. Daily, May 25, 2017.
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On July 28, 2017, Treasury Secretary Mnuchin sent a letter to Congress stating that extraordinary
measures would be used until September 29, 2017.146 His letter did not state that Treasury’s cash
reserves or borrowing capacity would be exhausted on that date, but he did describe the need for
legislative action by that date as “critical.” Others had estimated that the U.S. Treasury could
likely meet federal obligations until sometime in early October 2017.147 Treasury cash balances
and borrowing capacity in mid-September, however, were projected to fall below levels the U.S.
Treasury has considered prudent to maintain operations in the face of major adverse events.148
Debt Limit Again Suspended in September 2017
On September 3, 2017, Secretary Mnuchin argued that a debt limit measure should be tied to
legislation responding to Hurricane Harvey, which caused extensive damage in southeast
Texas.149 On September 6, 2017, outlines of an agreement on the debt limit and a continuing
resolution were announced between President Trump and congressional leaders.150 The following
day, the Senate, by an 80-17 vote, passed an amended version of H.R. 601, which included an
amendment (S.Amdt. 808) to suspend the debt limit and provide funding for government
operations through December 8, 2017, as well as supplemental appropriations for disaster relief.
On September 8, 2017, the House agreed on a 316-90 vote to the amended measure, which the
President signed the same day (Continuing Appropriations Act, 2018 and Supplemental
Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56).
Treasury Secretary Mnuchin invoked authorities to use extraordinary measures once that debt
limit suspension lapsed after December 8, 2017.151 He extended those authorities on January 30,
2018, through the end of February and urged congressional leaders to act on the debt limit before
that time.152 Secretary Mnuchin did not indicate that the U.S. Treasury would exhaust its
borrowing capacity or cash reserves by that date. CBO estimates and independent analysts had
suggested that those extraordinary measures would have lasted until sometime in early March.153

146 Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated July 28, 2017,
https://www.treasury.gov/initiatives/Documents/DL_Letter_20170316_Ryan.pdf.
147 Alec Phillips, “The Debt Limit: More Unpredictable than Usual,” Goldman Sachs U.S. Daily, August 8, 2017;
Wrightson ICAP, “Treasury Refunding Recap: Debt Limit,” Money Market Observer, August 7, 2017.
148 See discussion above in section entitled “Cash Management Changes.”
149 “Harvey Victim Funds May be Delayed Without Debt Limit Increase: Mnuchin,” Reuters, September 3, 2017,
https://www.reuters.com/article/us-storm-harvey-mnuchin/harvey-victim-funds-may-be-delayed-without-debt-limit-
increase-mnuchin-idUSKCN1BE0TP.
150 Damian Paletta and Ashley Parker, “Trump, Schumer Agree to Pursue Plan to Repeal the Debt Ceiling,”
Washington Post, September 7, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/09/07/trump-schumer-
agree-to-pursue-plan-to-repeal-the-debt-ceiling/.
151 Treasury Secretary Steven Mnuchin, letter to House Speaker Paul Ryan, dated December 11, 2017,
https://www.treasury.gov/initiatives/Documents/12.11_FINAL_CSRDF_Ryan_Letter.pdf. For other communications
with Congress, see the U.S. Treasury debt limit page at https://www.treasury.gov/initiatives/Pages/debtlimit.aspx.
152 Treasury Secretary Steven Mnuchin, letter to House Speaker Paul Ryan, dated January 30, 2018,
https://www.treasury.gov/initiatives/Documents/Ryan_DL_Letter.pdf. For a previous statement, see Saleha Mohsin and
Steven T. Dennis, “Treasury Asked Congress to Raise Debt Limit by Feb. 28, Sources Say,” Bloomberg Politics,
January 8, 2018, https://www.bloomberg.com/news/articles/2018-01-08/treasury-asks-congress-to-raise-debt-limit-by-
end-of-february.
153 See Wrightson ICAP, “Debt Limit Update,” Money Market Observer, January 15, 2018. Also see CBO, Federal
Debt and the Statutory Limit, January 31, 2018, https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/
53514-debtlimit.pdf.
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On February 9, 2018, enactment of the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123)
resolved the debt limit issue until 2019.154 BBA 2018 employed a legislative vehicle, H.R. 1892,
which had passed in both the House and Senate in different forms in 2017. On February 9, 2018,
differences in the amended measure were resolved by a vote of 71 to 28 in the Senate and a vote
of 240 to 186 in the House. BBA 2018 also increased statutory caps on discretionary spending,
extended funding of the government until March 23, 2018 (Section 20101), and funded certain
disaster assistance programs, among other provisions.
In July 2018, Secretary Mnuchin issued a report to Congress detailing Treasury’s use of
extraordinary measures.155
The Debt Limit in 2019
Debt Limit Suspension Reset on March 2, 2019
The debt limit suspension established by the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-
123) lapsed following March 1, 2019. The limit was then reset at $21.988 trillion to accommodate
federal obligations incurred during that suspension period. Ahead of that lapse, the U.S. Treasury
halted issuance of state and local government securities (SLGS) on March 1, 2019.156
On March 4, 2019, the first business day after the debt limit suspension had lapsed, U.S. Treasury
Secretary Mnuchin invoked extraordinary measures.157 On May 23, 2019, Secretary Mnuchin
notified Congress that he was extending the time period in which extraordinary measures would
be used.158 Secretary Mnuchin sent another letter to congressional leaders on July 12, 2019, that
stressed uncertainties in projections of cash flows and noted that “[b]ased on updated projections,
there is a scenario in which we run out of cash in early September, before Congress
reconvenes.”159
One private-sector forecast indicated that extraordinary measures and Treasury cash balances
might suffice until mid-September 2019, when inflows of quarterly tax receipts could continue
Treasury’s ability to make timely payments until early October.160 Treasury’s headroom—the sum

154 For context, see Thomas Kaplan, “Trump Signs Budget Deal to Raise Spending and Reopen Government,” New
York Times, February 8, 2018, https://www.nytimes.com/2018/02/08/us/politics/congress-budget-deal-vote.html.
155 U.S. Treasury, Report on Fund Operations and Status from December 11, 2017 to June 29, 2018 Pursuant to 5
U.S.C. § 8348(l)(1), July 27, 2018, https://www.treasury.gov/initiatives/Documents/CSRDF-Report-to-Congress-
07_27_2018.pdf.
156 U.S. Treasury, “Treasury to Suspend Sales of State and Local Government Series Securities,” February 22, 2019,
https://treasurydirect.gov/news/pressroom/pressroom_com022219.htm.
157 Treasury Secretary Steven Mnuchin, letter to congressional leaders, March 4, 2019, https://home.treasury.gov/
system/files/136/CSRDF-PSRHBF-Pelosi.pdf. See Daily Treasury Statement, March 4, 2019,
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=19030400.pdf.
158 Treasury Secretary Steven Mnuchin, letter to congressional leaders, May 23, 2019, https://home.treasury.gov/
system/files/136/Pelosi_DISP-for-CSRDF-and-PSRHBF.pdf. The debt issuance suspension period declared on March
4, 2019, extended to June 5, 2019. The May 23 letter further extended that period to June 25, 2019.
159 Treasury Secretary Steven Mnuchin, letter to congressional leaders, July 12, 2019, https://home.treasury.gov/
system/files/136/DL%20Letter%20to%20Congress%202019_07_12%20Pelosi.pdf.
160 Wrightson ICAP, The Money Market Observer, July 15, 2019.
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of remaining extraordinary measures and cash balances—would have probably dipped below
levels considered prudent in mid-August 2019.161
The size of federal deficits in 2019, which were higher than in immediately previous years,
affected the length of time extraordinary measures could be used to meet federal obligations.162
The federal budget deficit, according to the Congressional Budget Office, was $139 billion higher
in the first nine months of FY2019 compared to the same period in FY2018, which had increased
demands on Treasury to issue debt.163
Debt Limit Again Suspended Until 2021 by BBA 2019
On July 22, 2019, congressional and Administration officials announced that they had reached an
accord on the debt limit and discretionary spending limits, which was introduced as the Bipartisan
Budget Act of 2019 (BBA 2019; H.R. 3877).164 That measure passed the House on July 25, 2019,
on a 284-149 vote. The Senate approved it on August 1, 2019, on a 67-28 vote, and it was enacted
the following day P.L. 116-37. Title III of that measure suspended the debt limit through July 31,
2021.165 The agreement also adjusted upward limits on discretionary budget authority set by the
Budget Control Act of 2011 (BCA; P.L. 112-25).
The Debt Limit in 2021
The debt limit episode in 2021 was significantly affected by COVID-19, which was declared a
pandemic in March 2020. The pandemic abruptly slowed economic activity in spring 2020. In
any economic downturn, what economists call “automatic stabilizers” support macroeconomic
stability by counteracting the contraction in private aggregate demand. In particular, tax revenues
fall as slower economic activity shrinks tax bases. Outlays on income support programs, such as
Medicaid and unemployment insurance, rose as the number of households eligible increased
either because their incomes fell or because legislative changes expanded eligibility.
In 2020, however, the fiscal effects of automatic stabilizers166 were dwarfed by federal fiscal
measures enacted specifically in 2020167 and in 2021168 to support affected individuals and
businesses affected by the COVID-19 pandemic, according to CBO estimates.

161 See section entitled “Cash Management Changes” above.
162 Congressional Budget Office, Monthly Budget Review for November 2018, December 10, 2018,
https://www.cbo.gov/publication/54861.
163 CBO, Monthly Budget Review for June 2019, July 8, 2019, https://www.cbo.gov/publication/55415.
164 Speaker Nancy Pelosi, “Pelosi, Schumer Joint Statement on Budget Caps Agreement,” July 22, 2019,
https://www.speaker.gov/newsroom/72219-2/. Also see Speaker Nancy Pelosi, “Bipartisan Budget Agreement for
Fiscal Years 2020 and 2021,” July 22, 2019, https://www.speaker.gov/wp-content/uploads/2019/07/Bipartisan-Budget-
Agreement-July-22-2019.wp.pdf.
165 Additional provisions bar the U.S. Treasury from accumulating cash balances above what would be needed to fund
necessary obligations.
166 Congressional Budget Office (CBO), “Automatic Stabilizers in the Federal Budget: 2022 to 2032,” October 2022,
https://www.cbo.gov/publication/58593. Estimated effect of automatic stabilizers in FY2020 was 1.6% of GDP.
167 CBO, “The Budgetary Effects of Laws Enacted in Response to the 2020 Coronavirus Pandemic, March and April
2020,” June 2020, https://www.cbo.gov/system/files/2020-06/56403-CBO-covid-legislation.pdf. The total estimated
effect on federal deficits from those acts (P.L. 116-123, P.L. 116-127, P.L. 116-136, and P.L. 116-139) was $2.4
trillion, or 11.5% of GDP.
168 CBO, “The Budgetary Effects of Major Laws Enacted in Response to the 2020–2021 Coronavirus Pandemic,
December 2020 and March 2021,” September 2021, https://www.cbo.gov/system/files/2021-09/57343-Pandemic.pdf.
The total estimated effect on deficits from those acts (P.L. 116-260, P.L. 117-2) was $2.7 trillion, or 12.2% of GDP.
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Cash balances rose sharply after the March 2020 COVID-19 pandemic declaration, as then-
Treasury Secretary Mnuchin acted to enable rapid disbursement of CARES Act (P.L. 116-136)
payments as shown in Figure 3. After the debt limit suspension lapsed at the end of July 2021,
Treasury’s cash balances had shrunk to $459 billion.
Figure 3. Treasury Cash Balances, FY2008-FY2023
Billions of current dollars

Source: CRS analysis of Daily Treasury Statement data.
Notes: Before 2008 Treasury had kept some cash balances outside of the Federal Reserve account. The gap
after April 15, 2022, mostly reflects deposits from tax returns.
The seriousness of the COVID-19 pandemic, the economic disruption that ensued, and the scale
of federal fiscal responses, and uncertainty about how quickly federal fiscal support would be
disbursed all complicated Treasury’s debt operations. Those factors made it harder to predict how
long Treasury’s capacity to borrow and meet federal obligations would last once the debt limit
reset at the end of July 2021. While some forecasters expected a robust recovery in 2021 from the
COVID-19 pandemic’s effects on the economy, the timing of that rebound was uncertain.169
Treasury Secretary Yellen Declares DISP in August 2021
At the beginning of August 2021, the debt limit suspension set by BBA 2019 lapsed. The limit
was then reset at just over $28.4 trillion, as in previous resets to accommodate federal borrowing
during the suspension period. Treasury Secretary Janet Yellen then declared a “debt issuance
suspension period” (DISP) to access extraordinary measures.170 Debt Limit Increased by $480
Billion in October 2021

169 A Goldman Sachs projection for calendar year 2021 put GDP growth at 7.2%, although several other forecasters had
been less optimistic. Spencer Hill, “Anatomy of a Boom, Goldman Sachs Economic Analyst, March 28, 2021.
170 Treasury Secretary Janet Yellen, letter to congressional leaders, August 2, 2021,
https://home.treasury.gov/system/files/136/Debt-Limit-Letter-Congress_20210802_Pelosi.pdf.
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On September 21, 2021, the House passed a continuing resolution (H.R. 5305) to fund federal
operations through December 3. The measure also would have suspended the debt limit through
December 16, 2022. On September 27, 2021, the Senate declined to close further debate on the
bill.
In the September 28 letter, Secretary Yellen notified Congress that the DISP would be
extended.171 She noted that “Treasury is likely to exhaust its extraordinary measures if Congress
has not acted to raise or suspend the debt limit by October 18. At that point, we expect Treasury
would be left with very limited resources that would be depleted quickly.” Secretary Yellen also
extended the DISP on October 18, 2021,172 and November 16, 2021.173
In September 2021, Secretary Yellen also warned of dire consequences if the debt limit were not
raised before Treasury’s resources were exhausted.174 The credit rating agency Moody’s warned
that a federal default would deal a “catastrophic blow to the nascent economic recovery from the
COVID-19 pandemic” and that “global financial markets and the economy would be upended ...
even if resolved quickly.”175 Six former Treasury Secretaries wrote to Congress to warn that a
default caused by a lack of action on the debt limit “could cause serious economic and national
security harm.”176
On September 29, 2021, the House passed a stand-alone measure (S. 1301) on a 219–212 vote to
suspend the debt limit. On October 7, 2021, the Senate passed an amended version on a voice
vote, calling for a $480 billion increase in the limit. After the House deemed (H.Res. 716) to have
accepted the revision on October 12, the President signed it on October 14, 2021. About $300
billion of that increase enabled a reset of extraordinary measures.
Debt Again Nears its Limit in December 2021
The rapid pace of federal spending and the slowed pace of federal revenue collections required
elevated levels of federal borrowing, which soon pushed federal debt near its limit in late 2021.
The October 2021 debt limit increase did extend Treasury’s capacity to pay federal bills into
December 2021. Without a modification of the debt limit, however, Treasury might have
struggled to meet interest payments due at the end of December to the Social Security trust funds
and certain federal retirement trust funds, which are paid in the form of special Treasury
securities.

171 Treasury Secretary Janet Yellen, letter to congressional leaders, September 28, 2021,
https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress-20210928-Pelosi.pdf.
172 Treasury Secretary Janet Yellen, letter to congressional leaders, October 18, 2021,
https://home.treasury.gov/system/files/136/Debt-Limit-Letter-Congress-20211018-Pelosi.pdf.
173 Treasury Secretary Janet Yellen, letter to congressional leaders, November 16, 2021,
https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress-20211116.pdf.
174 Treasury Secretary Janet Yellen, “Janet Yellen: Congress, Raise the Debt Limit,” September 19, 2021, Wall Street
Journal, https://www.wsj.com/articles/congress-raise-debt-limit-ceiling-yellen-treasury-brinkmanship-federal-budget-
11632069056.
175 Mark Zandi and Bernard Yaros, “Playing a Dangerous Game With the Debt Limit,” September 21, 2021, Moody’s
Analytics, https://web.archive.org/web/20210929041410/https://www.moodysanalytics.com/-
/media/article/2021/playing-a-dangerous-game-with-the-debt-limit.pdf.
176 W. Michael Blumenthal, et al., letter to Speaker Nancy Pelosi, September 22, 2021,
https://home.treasury.gov/system/files/136/Former-Treasury-Secretaries-Letter-to-Congressional-Leadership-on-the-
Debt-Limit-9-22-21.pdf.
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At times, debt limit measures have been linked to appropriations measures.177 On December 3,
2021, however, a continuing resolution enacted to provide federal funding through February 18,
2022, contained no debt limit measure.
Infrastructure Act Mandates Transfer to Highway Trust Fund,
Reducing Treasury Headroom
The infrastructure act (P.L. 117-58) enacted on November 15, 2021, mandated a transfer of $118
billion into the Highway Trust Fund (HTF). Those funds would be held as special Treasury
securities, which are subject to the debt limit. Secretary Yellen stated those securities would be
issued on December 15, 2021, which would take up a significant portion of Treasury’s remaining
headroom under the debt limit.178 Wrightson/ICAP, a research unit specializing in Federal
Reserve and Treasury operations, noted that tax receipts due on that date would bolster Treasury’s
cash balances, but that Treasury’s headroom might soon shrink after that (Figure 4), although
according to its estimates, Treasury’s resources might have lasted into the first week of January
2022.179 The Congressional Budget Office estimated that Treasury’s resources would be
“exhausted soon” if HTF securities were issued in mid-December 2021.180
Although Secretary Yellen warned of “scenarios in which Treasury would be left with insufficient
resources to continue to finance the operations of the U.S. government” after December 15, 2021,
Wrightson/ICAP projected (Figure 4) that Treasury’s resources would have likely—but not
certainly—lasted into the first week of January 2022.

177 CRS Report R41814, Votes on Measures to Adjust the Statutory Debt Limit, 1978 to Present, by Justin Murray.
178 Treasury Secretary Janet Yellen, letter to congressional leaders, November 16, 2021,
https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress-20211116.pdf.
179 Wrightson ICAP, Money Market Observer, November 22, 2021.
180 CBO, “Federal Debt and the Statutory Limit, November 2021,” November 2021,
https://www.cbo.gov/publication/57653.
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Figure 4. Public Debt and Aggregate Treasury Borrowing Authority
Daily Level in Trillions of Dollars Since August 2021

Source: Wrightson ICAP, Money Market Observer, November 22, 2021.
Notes: Values projected from November 18, 2021, through December 20, 2021. Debt series includes pending
trust fund investments deferred using extraordinary measures.
Debt Limit Raised by $2.5 Trillion in Mid-December 2021
While Treasury’s resources may have lasted beyond December 15, 2021, Congress chose on that
day to approve a $2.5 trillion debt limit increase, which the President signed into law (P.L. 117-
73) the next day.181 That brought the debt limit to its current level of just under $31.4 trillion.

Author Information

D. Andrew Austin

Analyst in Economic Policy

181 The Senate approved S.J.Res. 33 on December 14, 2021, on a 50-49 vote. The House passed it shortly after
midnight the following day on a 221-209 vote.
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Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
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copy or otherwise use copyrighted material.

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