The Senate on Thursday passed an extension to the debt ceiling that is expected to allow the government to meet its financial obligations through December 3, the same day that a Continuing Resolution funding the government is set to expire.
A suspension of the debt ceiling, a legislative limit on the amount of cumulative debt the U.S. government is allowed to bear, expired on July 31, 2021. Congress and the White House in 2019 agreed to a two-year suspension of the debt ceiling, which at the time was set at $22 trillion. The debt limit came back into effect at $28.4 trillion on August 1 following expiration of the suspension. An additional $6.5 trillion had been borrowed since that deal was struck, but since the debt ceiling was suspended, the additional debt did not prevent the Treasury Department from meeting its obligations. That put total cumulative U.S. debt subject to the ceiling at $28.5 trillion – about $100 billion over the limit.
The Treasury Department this spring stated that it would use extraordinary measures to avoid defaulting when the ceiling took effect on August 1 and later said it could no longer meet its obligations as of October 18.
The Senate debt limit extension bill, which passed by a 50-48 vote, now heads to the House for a vote. House Majority Leader Steny Hoyer (D-MD) said the House will vote on the bill on Tuesday, October 12. President Biden must then sign it into law.
The bill increased the debt limit to roughly $28.9 trillion, about a $480 billion increase from what has been spent already and is about what is expected to be spent by early December.
Both the debt limit and annual appropriations must now be addressed before December 3 or the government risks defaulting on its debt and / or shutting down due to lack of funding from Congress.
