The debt ceiling, also known as the debt limit, is a legislative limit set by Congress on the amount of debt that the United States government can accumulate. It represents the maximum level of outstanding debt that the government can legally incur to meet its financial obligations. The debt ceiling is typically set as a specific dollar amount and serves as a mechanism to control government borrowing and expenditures.
When the government reaches the debt ceiling, it means that it has reached its authorized borrowing limit. At this point, the Treasury Department must take measures to avoid defaulting on its financial obligations, such as suspending certain government expenditures or employing accounting maneuvers to create additional borrowing capacity.
In order to increase or suspend the debt ceiling, Congress must pass legislation to authorize a higher borrowing limit. This process can be politically contentious and has historically led to debates and negotiations between lawmakers from different parties and ideological positions.