Budget Counsel Reference Directory

Public Debt Limit

Summary

The debt is statutorily limited in section 3101 of title 31 of the U.S. Code. When additional borrowing has been required by the Federal Government, the practice in recent years has not been to specifically amend the amount in the section but instead to “suspend” the application of the limit for a period of time. The last time the limit in 31 U.S.C. 3101 was amended and reset numerically was by the bill commonly known as the Statutory Pay-As-You-Go Act of 2010 (Pub. L. 111-139). It was set by that Act at $14.294 trillion. According to the Treasury Department, it is now approaching $22 trillion. By “suspending” the amount rather than directly increasing the number, it makes it slightly more difficult to figure out what the actual number is. Then again, with the political toxicity of taking a vote to increase the debt limit, any relief is apparently welcome, even if hardly a collective profile in courage.

Before 1917 Congress generally 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.

The statutory debt limit applies to almost all federal debt. 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.”

Debt Limit Increases Since 2011


Gephardt Rule

For a more extensive explanation of this House Rule, see the Gephardt Rule in the BCR Directory. In general, the rule streamlines the House consideration of a statutory public debt limit increase, so that when a concurrent resolution on the budget was adopted, it would automatically send a joint resolution, which becomes law, to the Senate specifically raising the debt limit in 31 U.S.C. 3101. 

The rule was in place for more than a decade before it was repealed by a Republican Congress. They found how difficult raising a debt limit can be, so they reinstituted it under Speaker Dennis Hastert. While the Democrats attempted to give it the new name of the “Hastert Rule” it did not. The Republicans lost their majority in the midterm elections of 2006 and when they regained it four years later, they again repealed the rule when the 112th Congress began. 

The Democrats, upon regaining the majority and taking back over on January 3, 2019, adopted H. Res. 6 (116th Congress) which reestablished the rule (again as Rule XXVIII), though it significantly changed it by making it easier to trigger since it only now requires the House adoption of a budget resolution, not both chambers. It also does not require the joint resolution to change the specific debt limit amount but rather a time period over which the debt limit will be suspended — starting with the enactment date of the joint resolution created by the rule and ending on September 30 of the “budget year” of the concurrent resolution on the budget that was adopted.  


Links

Department of the Treasury: Debt Limit

Debt Subject to Limit (Graph)

 

Debt Limit Increases

Public Debt Increases

2018: March Increase in Debt Limit (“Temporary” Suspension of Borrowing)


References

CRS – The Debt Limit Since 2011 (R43389) March 29, 2018

CRS – The Debt Limit: History and Recent Increases (RL31967) November 2, 2015

CRS – The Debt Limit: History and Recent Increases (RL31967) October 15, 2013

Recent Legislation, Budget Control Act of 2011: Congress Delegates Power to Raise the Debt Ceiling, 125 HARV. L. REV. 867, (2011).

New York Times – Debt and Line-Item-Veto Bills Approved (NY Times) March 29, 1996

 

Previous:

§066. President’s Budget

Next:

§068. Public Laws (Resources for Budget Law)

 

[BCR §067]