The Debt Limit Since 2011

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 has at times provided Congress with a means of raising concerns regarding 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 recession. Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years. On August 2, 2019, the Bipartisan Budget Act of 2019 (BBA 2019; P. L. 116-37; H. R. 3877), which modified discretionary spending limits, was enacted, suspending the debt limit until July 31, 2021. Once that suspension lapses, the Treasury Secretary can employ extraordinary measures to meet federal financial obligations. Several factors could make debt limit projections more uncertain in 2021.