The U.S. government will likely run out of money “in the first two weeks of June.” That’s when the Congressional Budget Office expects the Treasury Department will have exhausted the “extraordinary measures” it has been taking since Jan. 19 to keep paying the nation’s bills.
“If the debt limit is not raised or suspended before the Treasury’s cash and extraordinary measures are exhausted, the government will have to delay making payments for some activities, default on its debt obligations, or both,” CBO said in a May 12 report.
This type of warning comes every few years, when the nation reaches its debt limit and Congress needs to pass legislation to raise it.
Here we will review the last 10 times the U.S. hit the debt ceiling and had to rely on “extraordinary measures,” which are accounting strategies — such as suspending payments to retirement, health and disability funds for federal, civil service and U.S. Postal Service workers — to manage cash flow and debt.
Congress has raised the nation’s borrowing cap 78 times since 1960 – “49 times under Republican presidents and 29 times under Democratic presidents,” according to the Treasury Department.
The current debt limit was set at about $31.4 trillion in December 2021, when Congress raised it by $2.5 trillion, as explained by the Congressional Research Service in its report “The Debt Limit Since 2011.”
At the time, the Democrats controlled the White House and Congress. They raised the debt limit without a single Republican vote in the Senate and with only one Republican vote in the House.
This year, Republicans control the House, and they are demanding spending cuts and new or expanded work requirements for federal aid programs in exchange for raising the debt limit.
The GOP-controlled House narrowly passed legislation on April 26 that would raise the debt ceiling by $1.5 trillion to $32.9 trillion. The bill would also cap discretionary spending over the next 10 years, which would reduce projected budget deficits by $4.8 trillion over that time, according to CBO’s analysis of the bill.
Democratic leaders say spending cuts should be addressed in the annual appropriations process; they accuse the Republicans of holding the economy hostage.
President Joe Biden and the Democratic leaders have met twice at the White House with the top two Republican leaders – House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell – to discuss the debt ceiling impasse. The May 9 meeting reportedly resulted in little movement, but Biden and McCarthy were more hopeful that a deal could be reached after a second meeting on May 16.
McCarthy said a vote in the House could come as early as next week, while Biden expressed confidence that neither side would allow the U.S. to default.
“I’m confident that we’ll get the agreement on the budget, that America will not default,” Biden said on May 17 prior to leaving for a trip to Japan. “And every leader in the room understands the consequences if we fail to pay our bills. And it would be catastrophic for the — for the American economy and the American people if we didn’t pay our bills.”
Economists agree that a default would disrupt a U.S. economy that has been flirting with a recession for nearly a year.
“A default would be a catastrophic blow to the already fragile economy,” the chief economist of Moody’s Analytics, Mark Zandi, told a Senate subcommittee in March.
Typically, negotiations have dragged on for months and both parties have used the debt limit negotiations to extract budget concessions from the White House. The longest any negotiation lasted during the previous 10 debt limit increases was nearly eight months (2015) and the largest debt limit increase was $6.41 trillion (2019).
President Barack Obama
2011
Party in power: Split. Democrats controlled the White House and Senate; Republicans controlled the House.
Debt limit reached: May 16, 2011
Deadline to act (estimate): Aug. 2, 2011
The conflict: The Republicans took control of the House in January 2011. On May 9, 2011, House Speaker John Boehner said that any increase in the debt should be matched by spending cuts. “Let me be as clear as I can be: Without significant spending cuts and changes in the way we spend the American people’s money, there will be no increase in the debt limit,” Boehner told the Economic Club of New York. “And the cuts should be greater than the accompanying increase in the debt limit that the president is given.” The Obama administration wanted “a clean piece of legislation to raise the debt ceiling” without conditions.
The agreement: On Aug. 2, 2011, Obama signed the Budget Control Act of 2011. The law sought to control spending by capping all discretionary spending, including both military and non-military spending, to save $1.2 trillion over 10 years, beginning in fiscal year 2012. It also triggered $1.2 trillion in automatic spending cuts, scheduled to start in January 2013, as explained by CRS. The bill passed the Senate (74-26) and House (269-161) with bipartisan support. In addition to the scheduled budget spending caps and cuts, the bill raised the debt limit to $16.4 trillion in three stages. But the Government Accountability Office estimated that “delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011.” And, three days after Obama signed the legislation, Standard & Poor’s Rating Services downgraded the United States’ credit rating from AAA to AA+, saying the budget compromise was inadequate. The Budget Control Act of 2011 would factor in future debt limit and budget negotiations, with both parties seeking ways to raise the caps and spend more money.
Debt limit increased: $2.1 trillion. Treasury raised the debt limit $400 billion on Aug. 2, 2011, $500 billion on Sept. 22, 2011, and $1.2 trillion on Jan. 28, 2012, to a new debt limit of nearly $16.4 trillion.
Impasse lasted: Nearly three months.
2013
Party in power: Split. Democrats controlled the White House and Senate; Republicans controlled the House.
Debt limit reached: Dec. 31, 2012
Deadline to act (estimate): Mid-February/early March 2013
The conflict: Once again, Obama insisted on a clean bill to raise the debt ceiling without negotiating budget cuts, while the Republicans sought more spending cuts. “Republicans in Congress have two choices here: They can act responsibly, and pay America’s bills; or they can act irresponsibly, and put America through another economic crisis,” Obama said in a Jan. 14, 2013, news conference.
The agreement: In mid-January 2013, Boehner proposed a stop-gap measure that would suspend the debt limit for three months, while negotiations could continue on spending cuts. “Before there is any long-term debt limit increase, a budget should be passed that cuts spending,” Boehner said. The conservative Republican Study Committee agreed to the plan with the understanding that House GOP leaders would support deep cuts in the next budget. The bill, known as the No Budget, No Pay Act, suspended the debt limit through May 18, 2013, and reset the limit at the amount it would be on May 19, 2013. It also required both chambers of Congress to pass a budget resolution by April 15 or have their paychecks withheld and placed in escrow. In late January 2013, the Senate passed the bill 64-34 with mostly Democratic votes, while the House approved the bill 285-144 with mostly Republican votes.
Debt limit increased: $305 billion. Treasury reset the debt limit at nearly $16.7 trillion on May 19, 2013.
Impasse lasted: A little more than one month.
2013
Party in power: Split. Democrats controlled the White House and Senate; Republicans controlled the House.
Debt limit reached: May 20, 2013
Deadline to act (estimate): Oct. 17, 2013
The conflict: The debt limit became part of budget negotiations that included Republican attempts not only to curb spending but also to repeal the Affordable Care Act, also known as Obamacare. On Sept. 20, 2013, the Republican-controlled House, with 228 Republican votes and only two Democratic votes, approved a temporary budget plan that defunded Obamacare. On the same day, Obama responded by telling the Republicans that they can’t “threaten to blow the whole thing up just because you don’t get your way.” In remarks on Sept. 23, 2013, House Minority Leader Nancy Pelosi warned the Republicans: “Don’t mess with the debt limit.” The Democratic-controlled Senate rejected the House bill, and the budget stalemate resulted in a government shutdown on Oct. 1, 2013. On Oct. 15, 2013, Fitch Ratings warned that the U.S. credit rating was at risk of being downgraded. “The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S.,” Fitch said in a statement.
The agreement: The House Republicans gave up their demands and Congress passed a continuing resolution that ended the 16-day government shutdown and averted a possible default. The bill, which Congress passed a day after Fitch’s warning, resumed funding the government through Jan. 15, 2014, and suspended the debt limit through Feb. 7, 2014. The House passed the bill 285-144, and the Senate approved it 81-18 without any Democratic opposition. Obama signed it Oct. 17, 2013. “We fought the good fight. We just didn’t win,” Boehner said in an interview after the vote.
Debt limit increased: $213 billion. Treasury reset the debt limit at about $17.2 trillion on Feb. 7, 2014.
Impasse lasted: Nearly five months.
2014
Party in power: Split. Democrats controlled the White House and Senate; Republicans controlled the House.
Debt limit reached: Feb. 7, 2014
Deadline to act (estimate): Feb. 27, 2014
The conflict: The conflict was within the Republican caucus. House Republicans – after failing to defund Obamacare, despite forcing a government shutdown – this time didn’t try to use the debt limit as leverage to end Obamacare and didn’t want to shut down the government. There was still a desire to cut spending, but Boehner struggled to come up with a plan that had enough Republican votes to pass.
The agreement: With overwhelming support from Democrats, Congress passed a clean bill without conditions that suspended the debt limit for more than one year — through March 15, 2015. On Feb. 11, 2014, the House approved the Temporary Debt Limit Extension Act by a 221-201 vote, with 199 Republicans voting against it. The next day, the Senate voted 55-43 to pass the bill without any Republican votes. “A clean debt ceiling is a complete capitulation on the Speaker’s part,” Jenny Beth Martin, co-founder of Tea Party Patriots, said in a statement. “[I]t is time for him to go. … Fire the Speaker.” Boehner blamed a lack of consensus in his caucus. “When you don’t have 218 votes, you have nothing,” he said.
Debt limit increased: $901 billion. Treasury reset the debt limit at $18.1 trillion on March 16, 2014.
Impasse lasted: Almost three weeks.
2015
Party in power: Split. Democrats controlled the White House; Republicans controlled the House and Senate.
Debt limit reached: March 16, 2015
Deadline to act (estimate): No later than Nov. 3, 2015
The conflict: Once again, the Obama White House and congressional leaders were faced with the need to both increase the debt ceiling and negotiate a budget deal. The White House wanted a clean debt limit bill with no conditions. “We have made it clear that we are not going to let the debt ceiling be used as a way to extract commitments that otherwise would be unacceptable,” Treasury Secretary Jack Lew told NPR in an early October 2015 interview. Republicans refused to accept a clean bill. They also wanted a budget that would slow the growth of entitlement programs, but rejected a White House proposal to do just that because the White House also wanted to increase taxes and raise spending. In the middle of negotiations, Boehner announced on Sept. 25, 2015, that he would step down as House speaker and resign from Congress. A few days later, Congress passed and Obama signed a short-term spending bill to keep the government funded through Dec. 11, 2015, and prevent another government shutdown. It wasn’t until Oct. 22, 2015, that the two sides started to discuss a broader deal that would resolve both the budget and debt limit stalemate.
The agreement: Before Boehner left office, Obama and Republican leaders reached a two-year budget deal – the Bipartisan Budget Act of 2015. The agreement suspended the debt limit until March 15, 2017. The budget bill also increased the budget caps to allow for more spending on defense and non-defense discretionary programs. On Oct. 28, 2015 — Boehner’s last full day as speaker — the House approved the bill 266-167. All 167 “no” votes came from the Republicans. (Rep. Paul Ryan took over as House speaker on Oct. 29, 2015.) The outcome was similar in the Senate, where it passed 64-35 on Oct. 30, 2015, with no Democratic opposition. Obama signed the bill on Nov. 2, 2015, saying the legislation should “finally free us from the cycle of shutdown threats and last-minute fixes.”
Debt limit increased: $1.7 trillion. Treasury reset the debt limit at $19.8 trillion on March 16, 2017.
Impasse lasted: Nearly eight months.
President Donald Trump
2017
Party in power: Republicans controlled the White House, Senate and House.
Debt limit reached: March 16, 2017
Deadline to act (estimate): On or about Sept. 29, 2017
The conflict: The conflict again was among Republicans. Treasury Secretary Steven Mnuchin asked Congress to pass a clean bill before the August recess that would raise the debt limit without any conditions. But conservatives in the House and Senate wanted to tie spending cuts to the debt limit increase. After Hurricanes Harvey, Mnuchin urged Congress to pass a debt limit bill tied to disaster relief. For their part, House Democrats — led by Pelosi — initially wanted a clean bill, as they did under Obama, but later pushed for a short-term budget deal that would provide hurricane relief and give the party more leverage in the next round of negotiations.
The agreement: Trump agreed to a deal with Democratic leaders in the House and Senate over the objections of Republicans. A stop-gap budget bill — the Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017 – passed 316-90 in the House and 80-17 in the Senate, with all 17 “no” votes coming from Republicans. The bill, which Trump signed Sept. 8, 2017, kept the government funded through Dec. 8, 2017, and provided emergency aid for Hurricanes Harvey and Irma. It also suspended the debt limit through Dec. 8, 2017.
Debt limit increased: $647 billion. Treasury reset the debt limit at about $20.5 trillion on Dec. 9, 2017.
Impasse lasted: More than six months.
2018
Party in power: Republicans controlled the White House, Senate and House.
Debt limit reached: Dec. 9, 2017
Deadline to act (estimate): Feb. 28, 2018
The conflict: Coming off a short-term deal on the budget and debt limit, Congress now needed a longer-term solution. But, for months, Congress could not agree on a budget bill and instead repeatedly passed a series of stop-gap budget bills, known as continuing resolutions, to briefly keep funds flowing – except for three days in January, when the government was forced to partially shut down for lack of funding. Both Democrats and Republicans wanted to get out from under the budget caps that were put into place by the Budget Control Act of 2011. Trump sought to end the cap on defense spending, while Democrats wanted more money for domestic programs. House Democrats – led by Pelosi – also wanted to make the Deferred Action for Childhood Arrivals, or DACA, program permanent. (In the fall of 2017, the Trump administration announced it would begin phasing out the DACA program, which had been created under Obama to temporarily protect those brought into the country illegally at a young age. The program was set to expire in March 2018, but the federal courts allowed it to remain in place.)
The agreement: On Feb. 9, 2018, the House and Senate approved the Bipartisan Budget Act of 2018. The bill, which Trump signed the same day, raised the budget caps to provide an additional $290 billion for military and non-military programs and suspended the debt limit through March 1, 2019. The bill passed the Senate 71-28, with only 11 Democrats voting against it. The bill passed the House 240-186, with most House Democrats – 119 Democrats, including Pelosi — voting against it. The conservative Freedom Caucus also opposed the budget bill because it increased spending.
Debt limit increased: $1.53 trillion. Treasury reset the debt limit at nearly $22 trillion on March 2, 2019.
Impasse lasted: About two and a half months
2019
Party in power: Split. Republicans controlled the White House and Senate, while the Democrats controlled the House.
Debt limit reached: March 2, 2019
Deadline to act (estimate): Aug. 7, 2019
The conflict: Pelosi, now House speaker, said she would not agree to raising the debt limit unless the Republicans raised the spending caps imposed by the Budget Control Act of 2011. “[W]hen we lift the caps, then we can talk about lifting the debt ceiling, but that would have to come second or simultaneous, but not before lifting the caps,” she said. Trump wanted again to significantly increase military spending — which ultimately laid the groundwork for another bipartisan budget compromise.
The agreement: House Democrats reached a budget deal with Trump that resulted in the Bipartisan Budget Act of 2019 – a two-year, $2.7 trillion budget that raised the budget caps to allow an additional $322 billion for military and domestic programs. It also suspended the debt limit through July 31, 2021. The House passed the budget bill on a 284-149 vote. The Senate approved it 67-28.
Debt limit increased: $6.41 trillion. Treasury reset the debt limit at $28.4 trillion on Aug. 1, 2021.
Impasse lasted: Roughly five months.
President Joe Biden
2021
Party in power: Democrats controlled the White House, Senate and House.
Debt limit reached: Aug. 1, 2021
Deadline to act (estimate): Oct. 18, 2021
The conflict: Biden and Democratic congressional leaders wanted to pass a short-term budget bill that would also raise the debt limit. The House did just that on Sept. 21, 2021, when it passed a continuing budget resolution – without any Republican votes – that would have funded the government through Dec. 3, 2021, and suspended the debt limit through Dec. 16, 2022. The Senate Republicans, however, blocked the measure from coming up for a vote in the Senate. Senate Minority Leader Mitch McConnell wanted the debt limit increase to be included in another Democratic budget bill — a $3.5 trillion budget resolution and reconciliation plan, which passed the House along party lines in August. “There’s no chance Republicans will help lift Democrats’ credit limit so they can immediately steamroll through a socialist binge that will hurt families and help China,” McConnell said.
The agreement: In a compromise, the Senate Republicans agreed to a clean bill that increased the debt limit by $480 billion without being tied to either a short-term spending bill or the $3.5 trillion budget reconciliation bill. The Senate passed the bill 50-48 along party lines on Oct. 7, 2021. Biden signed it on Oct. 14, 2021.
Debt limit increased: $480 billion, bringing debt limit to $28.9 trillion.
Impasse lasted: A little more than two months.
2021
Party in power: Democrats controlled the White House, Senate and House.
Debt limit reached: Oct. 18, 2021
Deadline to act (estimate): Dec. 15, 2021
The conflict: Four days after Biden signed legislation that raised the debt limit by $480 billion, the Treasury secretary notified Congress that the debt limit had been reached and warned that the U.S. would be unable to pay its bills beyond Dec. 3, 2021 (later estimated at Dec. 15, 2021). “The rapid pace of federal spending and the slowed pace of federal revenue collections required elevated levels of federal borrowing, which soon pushed federal debt near its limit in late 2021,” the Congressional Research Service explained. But Republicans again did not want to help pass a debt limit increase, because of the Democrats’ use of the budget reconciliation process to avoid a filibuster in the Senate and pass a House-approved $2.2 trillion spending plan without Republican support. (The $2.2 trillion bill had been $3.5 trillion when it was introduced in August.)
The agreement: The negotiations between Senate Majority Leader Chuck Schumer and McConnell ultimately yielded a plan that would allow the Democrats to raise the debt limit without the threat of a filibuster that would block the measure from getting to the floor for a final vote. Not all Republicans supported McConnell’s approach. Sen. Ted Cruz called it a “terrible deal” that made the Republicans “complicit in the Democrats’ reckless spending.” But on Dec. 14, 2021, the Senate passed a joint resolution along party lines that raised the debt limit by $2.5 trillion and later that night (and into the morning) the House gave the final approval with only one Republican vote. Biden signed the legislation on Dec. 16, 2021.
Debt limit increased: $2.5 trillion, bringing the debt limit to its current level of $31.4 trillion.
Impasse lasted: About two months.
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