Besides their involvement with budgets and Congress, the two situations are completely different. Government shutdowns happen when Congress doesn’t approve annual federal funding legislation by October 1 — the beginning of a new fiscal year — or the date previous legislation expires. Debt ceilings, on the other hand, limit the amount of money the federal government can borrow to pay its bills. The effects of these shutdowns are far less severe than the effects of the U.S. defaulting on its payments, which can happen if the debt reaches its ceiling and Congress fails to increase or temporarily suspend the limit.