A debate over the debt ceiling is at the center of a dispute over funding that is pushing Washington to the brink of a federal government shutdown.
President-elect Donald Trump has demanded that a provision raising or suspending the nation’s debt limit — something that his own party routinely resists — be included in legislation to avert a government shutdown. “Anything else is a betrayal of our country,” Trump said in a statement Wednesday.
Republicans quickly complied, including a provision in a revamped government funding proposal that would suspend the debt ceiling for two years, until Jan. 30, 2027. But the bill failed overwhelmingly in a House vote Thursday evening, leaving next steps uncertain.
Here’s what to know about the debate over the debt ceiling and the role it’s playing in the shutdown saga:
What is the debt ceiling?
The debt ceiling, or debt limit, is the total amount of money that the United States government can borrow to meet its existing legal obligations. For the Treasury Department to borrow above that amount, the limit must be raised by Congress.
The federal debt stands at roughly $36 trillion, and the spike in inflation after the coronavirus pandemic has pushed up the government’s borrowing costs such that debt service next year will exceed spending on national security.
The last time lawmakers raised the debt limit was June 2023. Rather than raise the limit by a dollar amount, lawmakers suspended the debt limit through Jan. 1, 2025. At that point, the limit will be automatically raised to match the amount of debt that has been issued by the Treasury Department.
The debt limit vote in recent times has been used as a political leverage point, a must-pass bill that can be loaded up with other priorities.
What is the debt ceiling fight all about?
Trump has tied a demand for dealing with the debt ceiling to the dispute over government funding, saying one should not be addressed without the other.
When he rejected the spending proposal on Wednesday, Trump said that he wanted the debt ceiling debate settled before he takes office next month.
Warning of trouble ahead for Johnson and Republicans in Congress, Trump told Fox News Digital, “Anybody that supports a bill that doesn’t take care of the Democrat quicksand known as the debt ceiling should be primaried and disposed of as quickly as possible.”
What happens if the debt ceiling isn’t raised?
There’s actually no…