Once considered routine congressional practice, the passage of new debt ceiling bills in recent years has turned into politicized showdowns between the nation’s two prominent parties. In January 2023, the previous debt ceiling — a cap imposed by Congress on the nation’s annual debt — was reached and the United States Treasury estimated the country would no longer be able to pay its debts beginning June 5.
With just days remaining before the default was imminent, the Senate passed a bill preventing the delinquency, before being sent on to the White House for President Biden’s signature. Prior to the enactment of the new legislation, Congress had raised, extended or revised the debt ceiling 78 times since 1960.
In three minutes, Anita Ramasastry, Henry M. Jackson Professor of Law at UW Law, explains why a debt ceiling is necessary, how it is raised and the ruinous effects that may occur if the United States is ever unable to pay its financial obligations.
