ABSTRACT

Debt Limit in 2021 [July 14, 2021]   [open pdf - 987KB]

From the Document: "Debt limit episodes [hyperlink] --which can be defined as starting when the statutory limit on federal debt restricts some of the U.S. Treasury's normal debt operations and ending when new legislation to modify the limit is enacted--have been a recurrent federal fiscal feature in the past two decades. Since 2002, the debt limit has been modified 18 times [hyperlink]. The Bipartisan Budget Act of 2019 (P.L. 116-37), enacted in August 2019, suspended the debt limit through July 31, 2021. Recent debt limit episodes share similarities, although the issue in 2021 has a few unique characteristics. First, the COVID-19 [coronavirus disease 2019] pandemic remains a source of economic uncertainty, and the fiscal responses it spurred have accelerated the pace of federal debt accumulation. Second, the U.S. Treasury sharply increased its cash balances in 2020 to accommodate those fiscal responses. Third, since 2015, Bipartisan Budget Acts that adjusted statutory caps on discretionary spending imposed by the Budget Control Act of 2011 (BCA; P.L. 112-25) also suspended the debt limit. The expiration of those discretionary spending caps at the end of FY2021 rendered moot the need for legislation to modify them. Thus, the legislative vehicle used for the past few debt limit modifications is unavailable in 2021."

Report Number:
CRS Insight, IN11702
Author:
Publisher:
Date:
2021-07-14
Copyright:
Public Domain
Retrieved From:
Congressional Research Service: https://crsreports.congress.gov/
Format:
pdf
Media Type:
application/pdf
URL:
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