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1 1 (November 24, 2021)

handle is hein.crs/govefzf0001 and id is 1 raw text is: Congressional ____ ~ Research Service The Debt Limit in 2021 Updated November 24, 2021 Debt limit episodes have been a recurrent federal fiscal feature in the past two decades. Since 2002, the debt limit has been modified 19 times. In August 2019, the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37) suspended the debt limit through July 31, 2021. The limit was reset at just over $28.4 trillion at the beginning of August 2021 and was raised by $480 billion on October 14, 2021. The debt limit issue in 2021 has a few unique characteristics. The COVID-19 pandemic remains a source of economic uncertainty. Fiscal responses spurred by the pandemic accelerated the pace of federal debt accumulation. The U.S. Treasury also sharply increased its cash balances in 2020 to accommodate those fiscal responses. Since 2013, Congress has suspended the debt limit several times. The Bipartisan Budget Acts of 2015 (BBA 2015; P.L. 114-74), 2018 (BBA 2018; P.L. 115-123), and 2019 (BBA 2019; P.L. 116-37) 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. When those caps expired at the end of FY2021, the need for legislation to modify them was rendered moot. Thus, the usual legislative vehicle for debt limit modifications over the past decade became unavailable in 2021. Before 2013, debt limit legislation typically specified a set dollar amount on outstanding debt, either in stand-alone debt limit measures or packaged with other provisions, such as appropriations measures. Extraordinary Measures in Use Since August 2, 2021 The U.S. Treasury has used extraordinary measures to help pay federal obligations since August 2, 2021, when Treasury Secretary Janet Yellen declared a debt issuance suspension period (DISP). A DISP allows Treasury to suspend investments in Civil Service and U.S. Postal Service retirement funds. Treasury also draws on certain other, smaller funds, such as the Exchange Stabilization Fund. Federal financial operations continue normally, although debt limit restrictions complicate Treasury's debt and cash management. Secretary Yellen also notified Congress that the DISP would be extended on September 28, 2021, October 18, 2021, and November 16, 2021. Once a debt limit episode ends, Treasury must report on its use of extraordinary measures. Congressional Research Service https://crsreports.congress.gov IN11702 CRS INSIGHT Prepared for Members and Committees of Congress

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