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• Debt Limit: History and Recent Increases [September 8, 2010]

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  From the Summary: "Total debt of the federal government can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases 'debt held by the public.' Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases 'debt held by government accounts.' The sum of 'debt held by the public' and 'debt held by government accounts' is the total federal debt. Surpluses generally reduce debt held by the public, while deficits raise it. On September 3, 2010, total federal debt outstanding was $13.435 trillion."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2010-09-08
• Budget Control Act of 2011: Effects on Spending Levels and the Budget Deficit [October 5, 2011]

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  "The Budget Control Act of 2011 (BCA) was signed into law by President Obama on August 2, 2011 (P.L. 112-25). In addition to increasing the debt limit, the BCA contained a variety of measures intended to reduce the deficit by at least $2.1 trillion over the FY2012-FY2021 period. These included $917 billion in savings from statutory caps on discretionary spending and the establishment of a Joint Select Committee on Deficit Reduction to identify further budgetary savings of at least $1.2 trillion over 10 years. The BCA discretionary spending caps are projected to result in $917 billion in deficit reduction over the FY2012-FY2021 period. Several adjustments to the caps are permitted, including for spending on Overseas Contingency Operations and emergencies. The precise programmatic impact of these reductions in discretionary spending will be determined in the annual appropriations process. Under the Congressional Budget Office's (CBO's) August 2011 baseline, which incorporates the effects of the BCA, the discretionary spending caps result in a decline in spending in nominal dollar terms in FY2012 and FY2013. In nominal terms, discretionary spending does not regain its FY2011 level until FY2018. Discretionary spending has fallen in nominal terms only three times since FY1962, most recently in FY1996. […] Since the debt cannot perpetually rise faster than GDP, additional spending cuts or revenue increases would eventually be needed. Since deficit reduction under the BCA's discretionary caps is relatively small in FY2012, the short-term effects on the economy should be limited. Were Congress to enact a Joint Committee plan that reduced the deficit significantly in FY2012, this would increase the BCA's contractionary effects on the economy. In the long run, economic theory suggests that large deficits would have negative effects on interest rates, investment spending, trade deficits, and GDP [gross domestic product]."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Labonte, Marc

  2011-10-05
• Trends in Discretionary Spending [February 22, 2010]

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  "Discretionary spending is provided and controlled through appropriations acts, which fund many of the activities commonly associated with such federal government functions as running executive branch agencies, congressional offices and agencies, and international operations of the government. Essentially all spending on federal wages and salaries is discretionary. Federal spending in 2009 accounted for just under a quarter (24.7%) of the U.S. economy, as measured by gross domestic product (GDP). Federal spending since 1962 has averaged about a fifth of GDP. (Years denote federal fiscal years unless noted otherwise.) Discretionary spending accounted for 35.2% of total outlays in 2009, as extraordinary federal responses to financial turmoil sharply increased mandatory spending (59.5% of outlays in 2009), reducing discretionary spending's share of total spending. [...] The Obama Administration in its recent budget submission called for a three-year freeze on nonsecurity discretionary spending. Weak economic conditions have depressed federal revenues and may continue to increase government social safety-net expenditures. Some contend that additional stimulus measures are needed to reduce high unemployment levels, while others have called for imposing greater budgetary stringency. Over the long term, projected future growth in entitlement program outlays may put severe pressure on discretionary spending unless policy changes are enacted or federal revenues are increased. This report will be updated as events warrant." This CRS (Congressional Research Service) report also addresses Homeland Security and Defense spending.

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2010-02-22
• Debt Limit: History and Recent Increases [June 1, 2011]

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  From the Summary: "Total debt of the federal government can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases 'debt held by the public.' Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases 'debt held by government accounts.' The sum of 'debt held by the public' and 'debt held by government accounts' is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it. Total federal debt outstanding was $14,345 billion on May 31, 2011. The U.S. Treasury Secretary Timothy Geithner announced that the federal debt reached its statutory limit on May 16, 2011, and that he had declared a debt issuance suspension period, allowing certain extraordinary measures to extend Treasury's borrowing capacity until early August 2011. […] The recent economic slowdown led to sharply higher deficits in recent years, which led to a series of debt limit increases."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2011-06-01
• Mandatory Spending Since 1962 [June 15, 2011]

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  "Federal spending is often divided into three categories: discretionary spending, mandatory spending, and net interest. Mandatory spending includes federal government spending on entitlement programs as well as other budget outlays controlled by laws other than appropriation acts. Entitlement programs such as Social Security and Medicare make up the bulk of mandatory spending. Other mandatory spending programs include Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), unemployment insurance, some veterans' benefits, federal employee retirement and disability, Supplemental Nutrition Assistance Program (SNAP), and the earned income tax credit (EITC). Discretionary spending is provided and controlled through appropriations acts. In 2010, mandatory spending accounted for over half of total federal spending and over an eighth of gross domestic product (GDP). Social Security accounted for a fifth of federal spending. Medicare and the federal share of Medicaid, the fastest growing components of mandatory spending, together accounted for 23% of federal spending. Those three programs, therefore, made up over 43% of federal spending. The composition of mandatory spending has changed significantly over the past 40 years. In 1962, before the 1965 creation of Medicare and Medicaid, mandatory spending was less than 30% of all federal spending. At that time, Social Security accounted for about 13% of total federal spending or about half of all mandatory spending. […] Because discretionary spending is a smaller proportion of total federal outlays compared to mandatory spending, some budget experts contend that any significant reductions in federal spending must include cuts in entitlement spending. Other budget and social policy experts contend that cuts in entitlement spending could compromise their goals: the economic security of the elderly and the poor. This report will be updated annually."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2011-06-15
• Mandatory Spending Since 1962 [March 23, 2012]

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  "Federal spending is divided into three broad categories: discretionary spending, mandatory spending, and net interest. Mandatory spending is composed of budget outlays controlled by laws other than appropriation acts, including federal spending on entitlement programs. Entitlement programs such as Social Security and Medicare make up the bulk of mandatory spending. Other mandatory spending programs include Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), unemployment insurance, some veterans' benefits, federal employee retirement and disability, and Supplemental Nutrition Assistance Program (SNAP). In contrast to mandatory spending, discretionary spending is provided and controlled through appropriations acts. Net interest spending is the government's interest payments on debt held by the public, offset by interest income that the government receives. In FY2011, mandatory spending accounted for over half of total federal spending and over an eighth of GDP. Social Security accounted for a fifth of federal spending. Medicare and the federal share of Medicaid, the fastest growing components of mandatory spending, together accounted for 23% of federal spending. Those three programs, therefore, made up over 43% of federal spending. The composition of mandatory spending has changed significantly over the past 40 years. In 1962, before the 1965 creation of Medicare and Medicaid, mandatory spending was less than 30% of all federal spending. At that time, Social Security accounted for about 13% of total federal spending or about half of all mandatory spending."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Austin, D. Andrew

  2012-03-23
• Mandatory Spending Since 1962 [March 10, 2014]

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  "Federal spending is divided into three broad categories: discretionary spending, mandatory spending, and net interest. Mandatory spending is composed of budget outlays controlled by laws other than appropriation acts, including federal spending on entitlement programs. Entitlement programs such as Social Security and Medicare make up the bulk of mandatory spending. […] Over the long term, projections suggest that if current policies remain unchanged, the United States could face a major fiscal imbalance, largely due to rising health care costs and impending baby boomer retirements. Federal mandatory spending on health care is projected to expand from 4.7% of GDP [Gross Domestic Product] in FY2013 to 13.5% in FY2085 according to CBO's extended baseline projection. Social Security is projected to grow from 4.9% of GDP in FY2013 to 6.7% of GDP by FY2085. The share of mandatory spending continues to increase as a portion of total federal spending. Because discretionary spending is a smaller proportion of total federal outlays compared to mandatory spending, some budget experts contend that any significant reductions in federal spending must include cuts in entitlement spending. Other budget and social policy experts contend that cuts in entitlement spending could compromise their goals: the economic security of the elderly and the poor. This report will be updated annually."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Austin, D. Andrew

  2014-03-10
• Federal Budget: Current and Upcoming Issues [November 25, 2009]

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  "The federal budget implements Congress's 'power of the purse.' It expresses Congress's priorities as spending is allocated among competing aims. The Obama Administration's FY2010 budget submission described several important changes, including increased funding for certain domestic priorities, major programmatic reforms, and proposed spending cuts in some programs. [...] The federal government has undertaken significant financial interventions in an attempt to alleviate economic recession. The final costs of federal responses to this turmoil will depend on how quickly the economy recovers, how well firms with federal credit guarantees weather future financial shocks, and the magnitude of government losses or gains on its asset purchases. Estimating those costs is difficult, both for conceptual and operational reasons. Federal loans or loan guarantee programs may help provide liquidity to distressed financial markets and stimulate economic activity, but may also expose the federal government to substantial credit risks. While many economists concurred on the need for short-term fiscal stimulus despite adverse impact on the deficit, concerns remain about the long-term fiscal situation of the federal government. Rising costs of federal health care programs and Baby Boomer retirements present serious challenges to fiscal stability. Operating these programs in their current form may pass on substantial economic burdens to future generations. This report will be updated as events warrant."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2009-11-25
• Debt Limit: History and Recent Increases [April 10, 2013]

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  "Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases 'debt held by the public'. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases 'debt held by government accounts'. The sum of 'debt held by the public' and 'debt held by government accounts' is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it. […] Congress has always placed restrictions on federal debt. The form of debt restrictions, structured as amendments to the Second Liberty Bond Act of 1917, evolved into a general debt limit in 1939. Congress has voted to raise the debt limit 11 times since 2001, due to persistent deficits and additions to federal trust funds. Congress raised the limit in June 2002, and by December 2002 the U.S. Treasury asked Congress for another increase, which passed in May 2003. In June 2004, the U.S. Treasury asked for another debt limit increase and again in October 2004, which was enacted on November 19, 2004. In 2005, reconciliation instructions in the FY2006 budget resolution (H.Con.Res. 95) included a debt limit increase. After warnings from the U.S. Treasury, Congress passed an increase that the President signed on March 20. In 2007, Congress approved legislation (H.J.Res. 43) to raise the debt limit by $850 billion to $9,815 billion that the President signed September 29, 2007."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2013-04-10
• Budget Control Act of 2011: The Effects on Spending and the Budget Deficit [April 1, 2013]

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  "Following a lengthy debate over raising the debt limit, the Budget Control Act of 2011 (BCA; P.L. [Public Law] 112-25) was signed into law by President Obama on August 2, 2011. In addition to including a mechanism to increase the debt limit, the BCA contained measures intended to reduce the budget deficit through spending reductions. Combined, these measures were projected to reduce the deficit by roughly $2 trillion over the FY2012-FY2021 period. The spending reductions in the BCA are achieved mainly through two mechanisms: (1) statutory discretionary spending caps covering 10 years that came into effect in 2012 and (2) a $1.2 trillion automatic spending reduction process (sometimes referred to as the 'trigger') covering nine years that was initially scheduled to come into effect on January 2, 2013. The American Taxpayer Relief Act (ATRA; P.L. 112-240) postponed the start of the FY2013 spending reductions, commonly known as the sequester, until March 1, 2013, and canceled the first two months of spending cuts. Some Members of Congress have proposed additional modifications to the spending reduction process, including S. 16 in the 113th Congress that was considered immediately prior to the implementation of the FY2013 sequester on March 1, 2013. This report discusses the effects of the BCA on spending and the deficit, assuming that the automatic spending reductions proceed as scheduled from FY2013 to FY2021 and the discretionary spending caps remain in place. Other CRS [Congressional Research Service] reports provide additional analysis of the BCA."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Labonte, Marc

  2013-04-01
• FY2011 Federal Budget [June 17, 2010]

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  "This report provides an historical overview of the budget trends through the most recently completed fiscal year (2009). It discusses major budgetary challenges over the past several fiscal years given the current economic conditions and provides an in-depth discussion of the FY2011 budget process. Finally, it provides context for the issues facing the country's federal budget over the long term. This report will be updated as events warrant."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2010-06-17
• Debt Limit: History and Recent Increases [May 3, 2013]

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  "Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases 'debt held by the public'. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases 'debt held by government accounts'. The sum of 'debt held by the public' and 'debt held by government accounts' is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2013-05-03
• Federal Budget: Issues for FY2014 and Beyond [May 9, 2013]

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  "The federal budget is central to Congress's ability to exercise its 'power of the purse.' Federal budget decisions also express Congress's priorities and reinforce Congress's influence on federal policies. Making budgetary decisions for the federal government is a complex process and requires balancing competing goals. Recent economic turmoil put strain on the federal budget due to declining revenues and increasing spending levels. Subsequently, policies enacted to restrain spending, along with an improving economy, have put the federal budget on a more sustainable path in the near term. In August 2011, budget negotiations resulted in the enactment of the Budget Control Act of 2011 (BCA; P.L. [Public Law] 112-25), which contained provisions to reduce the budget deficit by about $2 trillion over the next decade. However, the rising costs of federal health care programs and the effects of the baby boom generation's retirement, which present serious challenges to future fiscal stability, have yet to be addressed. Operating these programs in their current form may pass on substantial economic burdens to future generations. Congress and the President may consider proposals for additional deficit reduction over the next few months as fiscal issues remain a key component of the legislative agenda as the future outlook remains uncertain. This report will provide an overview of federal budget issues, focusing on recent fiscal policy changes. It will also discuss the major policy proposals contained in the President's FY2014 budget and the House and Senate budget resolutions. This report will be updated as events warrant."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2013-05-09
• How Treasury Issues Debt [August 18, 2009]

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  "The U.S. Department of the Treasury (Treasury), among other roles, manages the country's debt. The primary objective of Treasury's debt management strategy is to finance the government's borrowing needs at the lowest cost over time. To accomplish this Treasury adheres to three principles: (1) to issue debt in a regular and predictable pattern, (2) to provide transparency in the decision-making process, and (3) to seek continuous improvements in the auction process. Specifically, the Office of Debt Management (ODM) makes all decisions related to debt issuance and the management of the United States debt portfolio. When federal spending exceeds revenues, the ODM directs the Bureau of Public Debt (BPD) to borrow the funds needed to finance government operations by selling securities to the public and government agencies via an auction process. BPD manages the operational aspects of the issuance of Treasury securities, including the systems related to and the monitoring of the auction process. [...] Legislative activity can affect Treasury's ability to issue debt and can impact the budget process. Congress sets a statutory limit on federal debt levels in an effort to assert its constitutional prerogatives to control spending and impose a form of fiscal accountability. The statutory limit on the debt can constrain debt operations, which, in the past, has hampered traditional practices when the limit was approached. The accounting of asset purchases in the federal budget has created differences between how much debt Treasury has to borrow to make those purchases and how much the same purchases will impact the budget deficit. If budget deficits continue to rise, thereby causing more resources to be devoted to paying interest on the debt, there will be fewer funds available to spend on other federal programs, all else equal. This report will be updated as events warrant."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2009-08-18
• Export-Import Bank Reauthorization: Frequently Asked Questions [August 1, 2014]

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  "The Export-Import Bank of the United States (Ex-Im Bank or the Bank), a wholly owned federal government corporation, is the official export credit agency (ECA) of the U.S. government. Its mission is to assist in the financing of U.S. exports of goods and services to support U.S. employment. The agency's general statutory charter (Export-Import Bank Act of 1945, as amended, 12 U.S.C. §635 et seq.) expires on September 30, 2014. A sunset in Ex-Im Bank's authority would mean that the agency's authority to enter into new obligations generally would cease and a wind-down of operations would be required. (This issue is distinct from an 'authorization of appropriations' expiring, which would not, in and of itself, terminate such authority to operate.) Congress is actively debating whether to renew Ex-Im Bank's authority; if so, for how long and under what terms; and if not, the possibility of other policy options. The issue of Ex-Im Bank reauthorization has raised a number of frequently asked questions regarding Ex-Im Bank itself and reauthorization policy options."

  Library of Congress. Congressional Research Service

  Akhtar, Shayerah Ilias; Carpenter, David Hatcher; Levit, Mindy R. . . .

  2014-08-01
• Export-Import Bank Reauthorization: Frequently Asked Questions [September 10, 2014]

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  "The Export-Import Bank of the United States (Ex-Im Bank or the Bank), a wholly owned federal government corporation, is the official export credit agency (ECA) of the U.S. government. Its mission is to assist in the financing of U.S. exports of goods and services to support U.S. employment. The agency's general statutory charter (Export-Import Bank Act of 1945, as amended, 12 U.S.C. §635 et seq.) expires on September 30, 2014. A sunset in Ex-Im Bank's authority would mean that the agency's authority to enter into new obligations generally would cease and a wind-down of operations would be required. (This issue is distinct from an 'authorization of appropriations' expiring, which would not, in and of itself, terminate such authority to operate.) Congress is actively debating whether to renew Ex-Im Bank's authority; if so, for how long and under what terms; and if not, the possibility of other policy options. The issue of Ex-Im Bank reauthorization has raised a number of frequently asked questions regarding Ex-Im Bank itself and reauthorization policy options. This report addresses many of those questions, including: (1) What is the Export-Import Bank? (2) What is the reauthorization debate over Ex-Im Bank? (3) What is the Bank's market and international context? (4) What is its leadership structure? (5) What are its programs, policies, and activities? (6) How does its budget work? (7) How does it manage risk? (8) What are the implications of a sunset in authority for the Bank's activities? (9) What are historical and current approaches to Ex-Im Bank reauthorization?"

  Library of Congress. Congressional Research Service

  Akhtar, Shayerah Ilias; Carpenter, David Hatcher; Levit, Mindy R. . . .

  2014-09-10
• Federal Budget: Overview and Issues for FY2015 and Beyond [November 4, 2014]

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  "The federal budget is central to Congress's ability to exercise its 'power of the purse.' Each fiscal year Congress and the President undertake a variety of steps intended to set levels of spending and revenue and to make policy decisions. The purpose of this report is to provide an overview and background on the current budget debate. This report will track legislative events related to the federal budget and will be updated as budgetary legislation moves through Congress."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2014-11-04
• Export-Import Bank Reauthorization: Frequently Asked Questions [November 26, 2014]

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  "The Export-Import Bank of the United States (Ex-Im Bank or the Bank), a wholly owned federal government corporation, is the official export credit agency (ECA) of the U.S. government. Its mission is to assist in the financing of U.S. exports of goods and services to support U.S. employment. The FY2015 continuing resolution (CR; Sec. 147 of P.L. 113-164) extends Ex-Im Bank's general statutory charter (Export-Import Bank Act of 1945, as amended, 12 U.S.C. §635 et seq.) through June 30, 2015. Previously, the charter was set to sunset on September 30, 2014 (P.L. 112-122). A sunset in Ex-Im Bank's authority would mean that the agency's authority to enter into new obligations generally would cease and a wind-down of operations would be required. (This issue is distinct from an 'authorization of appropriations' expiring, which would not, in and of itself, terminate such authority to operate.) As the new sunset date approaches, Congress is likely to debate whether to renew Ex-Im Bank's authority; if so, for how long and under what terms; and if not, other policy alternatives. The issue of Ex-Im Bank reauthorization raises a number of frequently asked questions regarding Ex-Im Bank itself and reauthorization policy options. This report addresses many of those questions, including: (1) What is the Export-Import Bank? (2) What is the reauthorization debate over Ex-Im Bank? (3) What is the Bank's market and international context? (4) What is its leadership structure? (5) What are its programs, policies, and activities? (6) How does its budget work? (7) How does it manage risk? (8) What are the implications of a sunset in authority for the Bank's activities? And (9) What are historical and current approaches to Ex-Im Bank reauthorization?"

  Library of Congress. Congressional Research Service

  Akhtar, Shayerah Ilias; Carpenter, David Hatcher; Levit, Mindy R. . . .

  2014-11-26
• Debit Limit: History and Recent Increases [October 15, 2013]

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  "Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases debt held by the public. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases debt held by government accounts. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it. […] Congress has always restricted federal debt. The Second Liberty Bond Act of 1917 included an aggregate limit on federal debt as well as limits on specific debt issues. Through the 1920s and 1930s, Congress altered the form of those restrictions to give the U.S. Treasury more flexibility in debt management and to allow modernization of federal financing. In 1939, a general limit was placed on federal debt. […] Congress, aside from two measures noted above, has modified the debt limit 10 times since 2001, due to persistent deficits and additions to federal trust funds. Congress raised the limit in June 2002, May 2003, November 2004, March 2006, and September 2007. The 2007-2008 fiscal crisis and subsequent economic slowdown led to sharply higher deficits in recent years, which led to a series of debt limit increases."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2013-10-15
• Debt Limit: History and Recent Increases [August 27, 2013]

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  "Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases 'debt held by the public'. Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases 'debt held by government accounts'. The sum of 'debt held by the public' and 'debt held by government accounts' is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it. [...] Congress has always restricted federal debt. The Second Liberty Bond Act of 1917 included an aggregate limit on federal debt as well as limits on specific debt issues. Through the 1920s and 1930s, Congress altered the form of those restrictions to give the U.S. Treasury more flexibility in debt management and to allow modernization of federal financing. In 1939, a general limit was placed on federal debt."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2013-08-27
• Debt Limit: History and Recent Increases [May 22, 2012]

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  "Total federal debt can increase in two ways. First, debt increases when the government sells debt to the public to finance budget deficits and acquire the financial resources needed to meet its obligations. This increases 'debt held by the public.' Second, debt increases when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses. This increases 'debt held by government accounts.' The sum of 'debt held by the public and debt held by government accounts' is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it. […] The recent economic slowdown led to sharply higher deficits in recent years, which led to a series of debt limit increases. The Housing and Economic Recovery Act of 2008 (H.R. 3221), signed into law (P.L. 110-289) on July 30, 2008, included a debt limit increase. The Emergency Economic Stabilization Act of 2008 (H.R. 1424), signed into law on October 3 (P.L. 110-343), raised the debt limit again. The debt limit rose a third time in less than a year to $12,104 billion with the passage of the American Recovery and Reinvestment Act of 2009 on February 13, 2009 (ARRA; H.R. 1), which was signed into law on February 17, 2009 (P.L. 111-5). Following that measure, the debt limit was subsequently increased by $290 billion to $12,394 billion (P.L. 111- 123) in a stand-alone debt limit bill on December 28, 2009, and by $1.9 trillion to $14,294 billion on February 12, 2010 (P.L. 111-139), as part of a package that also contained the Statutory Pay- As-You-Go Act of 2010. This report will be updated as events warrant."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2012-05-22
• Budget Control Act of 2011: Legislative Changes to the Law and Their Budgetary Effects [March 6, 2014]

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  "Following a lengthy debate over raising the debt limit, the Budget Control Act of 2011 (BCA; P.L. 112-25) was signed into law by President Obama on August 2, 2011. In addition to including a mechanism to increase the debt limit, the BCA contained provisions intended to reduce the budget deficit. Combined, these provisions were projected to reduce the deficit by roughly $2 trillion over the fiscal year (FY)2012-FY2021 period. The savings in the BCA are achieved mainly through two mechanisms: (1) statutory discretionary spending caps covering 10 years that came into effect in 2012 and (2) a requirement for an additional $1.2 trillion in savings to be achieved through legislation or an automatic spending reduction process (sometimes referred to as the 'sequester') covering nine years that was initially scheduled to come into effect on January 2, 2013. These mechanisms are discussed in more detail below. Since the enactment of the BCA, two subsequent pieces of legislation have modified it. First, the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) postponed the start of the FY2013 spending reductions, until March 1, 2013, and canceled the first two months of spending cuts. Subsequently, the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67) increased discretionary spending levels for FY2014 and FY2015 relative to what they would have been under the BCA. Both pieces of legislation contained provisions that offset these changes. This report discusses the legislative changes affecting the Budget Control Act and focuses on how these changes have altered spending levels and deficit projections. Other CRS [Congressional Research Service] reports provide additional analysis of the BCA."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2014-03-06
• Federal Budget: Overview and Issues for FY2015 and Beyond [April 11, 2014]

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  "The Obama Administration released its FY2015 budget in two parts--the first on March 4, 2014, and the second on March 10, 2014. In his budget, President Obama proposes an 'Opportunity, Growth, and Security Initiative' to provide additional funding for unspecified discretionary programs in FY2015. The budget also proposes to eliminate the BCA [Budget Control Act of 2011] sequester on mandatory programs in FY2015. These proposals yield a deficit for FY2015 that is slightly higher than what is currently projected in the CBO [Congressional Budget Office] baseline. Congressional consideration of FY2015 budget and appropriations legislation has already begun. The BBA [Bipartisan Budget Act of 2013] contained a provision directing the House and Senate Budget Committee chairmen to file spending and revenue levels in the 'Congressional Record' that would be enforceable in the same manner as a concurrent budget resolution for FY2015 if an agreement on a budget resolution could not be reached by April 15, 2014. However, nothing would preclude Congress from acting on a budget resolution for FY2015 even after those levels have been filed. It has been reported that Senate Budget Committee Chairman Patty Murray has signaled that the provisions contained in the BBA make a budget resolution for FY2015 unnecessary. […] Projections indicate that putting the federal budget on a sustainable long-term path will require an agreement on additional deficit reduction. Such an agreement could include increases in revenues, changes to large spending programs, or some combination of the two."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2014-04-11
• Federal Budget: Overview and Issues for FY2016 and Beyond [March 6, 2015]

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  From the report summary: "The federal budget is central to Congress's ability to exercise its 'power of the purse.' Each fiscal year Congress and the President undertake a variety of steps intended to set levels of spending and revenue and to make policy decisions. The purpose of this report is to provide an overview and background on the current budget debate. This report will track legislative events related to the federal budget and will be updated as budgetary legislation moves through Congress."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.

  2015-03-06
• Debt Limit: History and Recent Increases [April 7, 2009]

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  "A statutory limit has restricted total federal debt since 1917 when Congress passed the Second Liberty Bond Act. Congress has raised the debt limit seven times since 2001. Deficits each year since 2001 and the persistent increases in debt held by government accounts repeatedly raised the debt to or near the limit in place at the time. Congress raised the limit in June 2002, and by December 2002 the U.S. Department of the Treasury asked Congress for another increase, which was passed in May 2003. In June 2004, the Treasury asked for another debt limit increase. After Congress recessed in mid-October 2004 without acting, the Secretary of the Treasury told Congress that the actions he was taking to avoid exceeding the debt limit would suffice only through mid-November. Congress approved a debt limit increase in a post-election session, which the President signed on November 19, 2004."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2009-04-07
• Federal Budget: Current and Upcoming Issues [December 10, 2008]

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  "The federal budget implements Congress's 'power of the purse' by expressing funding priorities through outlay allocations and revenue collections. Over the past decade, federal spending has accounted for approximately a fifth of the economy (as measured by gross domestic product-- GDP) and federal revenues have ranged between just over a fifth and just under a sixth of GDP. In FY2008, the U.S. government collected $2.5 trillion in revenue and spent almost $3.0 trillion. Outlays as a proportion of GDP rose from 18.4% in FY2000 to 20.9% of GDP in FY2008. Federal revenues as a proportion of GDP reached a post-WWII peak of 20.9% in FY2000 and then fell to 16.3% of GDP in FY2004 before rising slightly to 17.7% of GDP in FY2008. The budget also affects, and is affected by, the national economy as a whole. Given recent turmoil in the economy and financial markets, the current economic climate poses a major challenge to policymakers shaping the FY2009 and FY2010 federal budgets. Federal spending tied to meanstested social programs has been increasing due to rising unemployment, while federal revenues will likely fall as individuals' incomes drop and corporate profits sink. As a result, federal deficits over the next few years will likely be high relative to historic norms. [...] While many economists concur on the need for short-term fiscal stimulus, widespread concerns remain about the long-term fiscal situation of the federal government. The rising costs of federal health care programs and Baby Boomer retirements present serious challenges to fiscal stability. Operating these programs in their current form may pass on substantial economic burdens to future generations."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Austin, D. Andrew

  2008-12-10
• Debt Limit: History and Recent Increases [March 7, 2011]

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  "A statutory limit has restricted total federal debt since 1917, when Congress passed the Second Liberty Bond Act. Congress has voted to raise the debt limit 10 times since 2001. Deficits each year since 2001 and the persistent increases in debt held by government accounts repeatedly raised the debt to or near the limit in place at the time. [...] The current economic slowdown led to sharply higher deficits in recent years, which led to a series of debt limit increases. The Housing and Economic Recovery Act of 2008 (H.R. 3221), signed into law (P.L. 110-289) on July 30, 2008, included a debt limit increase. The Emergency Economic Stabilization Act of 2008 (H.R. 1424), signed into law on October 3 (P.L. 110-343), raised the debt limit again. The debt limit rose a third time in less than a year to $12,104 billion with the passage of the American Recovery and Reinvestment Act of 2009 on February 13, 2009 (ARRA; H.R. 1), which was signed into law on February 17, 2009 (P.L. 111-5). The House's adoption of the conference report on the FY2010 budget resolution (S.Con.Res. 13) on April 29, 2009, triggered the automatic passage of H.J.Res. 45 to raise the debt limit to $13,029 billion. In August 2009, Treasury reportedly said that the debt limit would be reached in mid-October, although it later stated that the limit would not be reached until December 2009. H.R. 4314, passed by the House on December 16, 2009, and by the Senate on December 24, raised the debt limit to $12,394 billion when the President signed the measure (P.L. 111-123) on December 28. On January 28, the Senate passed an amended version of H.J.Res. 45, which the House passed on February 4 and the President signed on February 12 (P.L. 111-139), raising the limit to $14,294 billion. This report, written with the assistance of Joseph McCormack, will be updated as events warrant."

  Library of Congress. Congressional Research Service

  Austin, D. Andrew; Levit, Mindy R.

  2011-03-07
• Reaching the Debt Limit: Background and Potential Effects on Government Operations [January 4, 2013]

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  "The gross federal debt, which represents the federal government's total outstanding debt, consists of two types of debt: (1) debt held by the public and (2) debt held in government accounts, also known as intragovernmental debt. Federal government borrowing increases for two primary reasons: (1) budget deficits and (2) investments of any federal government account surpluses in Treasury securities, as required by law. Nearly all of this debt is subject to the statutory limit. The federal debt limit currently stands at $16,394 billion. Treasury has yet to face a situation in which it was unable to pay its obligations as a result of reaching the debt limit. In the past, the debt limit has always been raised before the debt reached the limit. However, on several occasions Treasury took extraordinary actions to avoid reaching the limit and, as a result, affected the operations of certain programs. If the Secretary of the Treasury determines that the issuance of obligations of the United States may not be made without exceeding the public debt limit, Treasury can make use of 'extraordinary measures.' Some of these measures require the Treasury Secretary to authorize a debt issuance suspension period."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Brass, Clinton T.; Nicola, Thomas J.

  2013-01-04
• Reaching the Debt Limit: Background and Potential Effects on Government Operations [February 11, 2011]

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  "The federal government's statutory debt limit is currently $14,294 billion (P.L. 111-139).1 On January 6, 2011, Secretary of the Treasury Timothy Geithner issued a letter to Congress stating that the debt limit would be reached sometime between March 31 and May 16, 2011. Treasury has subsequently revised these estimates saying they now expect to reach the debt limit sometime between April 5, 2011, and May 31, 2011, due to an upward revision to projected receipts and a downward revision in projected debt to be issued to government trust funds. […] This report examines the possibility of the federal government reaching its statutory debt limit and not raising it, with a particular focus on government operations. First, the report explains the nature of the federal government's debt, the processes associated with federal borrowing, and historical events that may influence prospective actions. It also includes an analysis of what could happen if the federal government may no longer issue debt, has exhausted alternative sources of cash, and, therefore, depends on incoming receipts or other sources of funds to provide any cash needed to liquidate federal obligations.3 Finally this report lays out considerations for increasing the debt limit under current policy and what impact fiscal policy could have on the debt limit going forward."

  Library of Congress. Congressional Research Service

  Nicola, Thomas J.; Nuschler, Dawn; Shelton, Alison M. . . .

  2011-02-11
• Reaching the Debt Limit: Background and Potential Effects on Government Operations [May 31, 2012]

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  "The gross federal debt, which represents the federal government's total outstanding debt, consists of two types of debt: (1) debt held by the public and (2) debt held in government accounts, also known as intragovernmental debt. Federal government borrowing increases for two primary reasons: (1) budget deficits and (2) investments of any federal government account surpluses in Treasury securities, as required by law. Nearly all of this debt is subject to the statutory limit. The federal debt limit currently stands at $16,394 billion. Treasury has yet to face a situation in which it was unable to pay its obligations as a result of reaching the debt limit. In the past, the debt limit has always been raised before the debt reached the limit. However, on several occasions Treasury took extraordinary actions to avoid reaching the limit and, as a result, affected the operations of certain programs. If the Secretary of the Treasury determines that the issuance of obligations of the United States may not be made without exceeding the public debt limit, Treasury can make use of 'extraordinary measures.' Some of these measures require the Treasury Secretary to authorize a debt issuance suspension period. After a lengthy debate over the debt limit in the summer of 2011, the enactment of the Budget Control Act of 2011 (P.L. 112-25) on August 2, 2011, provided for an increase in the debt limit to its current level. Secretary Geithner has stated that the current debt limit will likely be reached before the end of the year and the use of extraordinary measures could likely stave off an increase in the debt limit until early 2013."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Brass, Clinton T.; Nicola, Thomas J. . . .

  2012-05-31