Congress on Wednesday took its first steps toward raising or suspending debt limits, as the country faces the prospect of defaulting on its obligations in less than two weeks.
why it matters: While this isn’t the first time Congress has waited until the last minute to tackle a federal debt limit, America has never defaulted. Treasury Secretary Janet Yellen recently said that defaulting would likely trigger a recession.
By numbers: The debt limit was enacted in 1917 for $11.5 billion Committee for a Responsible Federal Budget. A debt limit covering nearly all government debt was created in 1939, set at $45 billion.
- Congress raised the debt limit from $4.37 trillion in the spring of 1993 to $28.4 trillion by August 1, 2012. The latest numbers were based on current debt when the previous suspension ended on July 31.
- The ceiling has been suspended seven times since February 2013.
Between the lines: Since the debt limit was set on August 1, Yellen has used his officers as Treasury secretary to take “extraordinary measures” to avoid defaulting on loans — including withholding certain investments.
- Those efforts are expected to end by October 18.