![]() ![]() Raising the debt limit does not authorize new spending, but allows the Treasury to pay the bills for spending that has already been authorized by Congress. From 1940 through spring of 2015, Congress has raised, suspended, or otherwise changed the debt limit 114 times. Congress has the legal authority to raise the debt ceiling as needed. If the level of federal debt hits the debt ceiling, the government cannot borrow additional funds, which could lead to sudden interruptions in government services. The debt ceiling is the legal limit set by Congress on the total amount that the U.S. Budget resolutions passed by the House and Senate for fiscal year 2016 would reduce deficits to zero through extensive spending cuts and no planned revenue increases. For instance, the president's proposed fiscal year 2016 budget would run a deficit of $474 billion in fiscal 2016, with plans to achieve $1.8 trillion in total deficit reduction over 10 years. Most budget proposals, including the president's and those from various groups in Congress, feature deficit reduction through either decreased spending or increased revenues, or both. Since 1976, on average about ten percent of the annual federal budget has gone toward paying down interest on the debt. In 2015, about six percent of all federal spending, or $229 billion, will go toward paying interest on the federal debt. Interest on DebtĮach year, part of the federal budget goes toward paying down interest on the federal debt. As of February 11, 2015, federal debt stood at $18.1 trillion. In the event of a surplus, the extra money is used to pay down the existing debt. ![]() Every year that the federal government runs a deficit, that amount is added to the federal debt. The federal debt, or national debt, is the sum of all past years' deficits. If, however, spending exceeds revenues, the result is a budget deficit. If revenues match spending in a given year, the government has a balanced budget. The size of the budget deficit in a given year is determined by two factors: the amount of money the government spends that year and the amount of revenue the government collects. Over the past 50 years, the budget deficit averaged 2.8 percent of the U.S. economy in fiscal 2009, to a projected 3.2 percent in 2015. Federal Budget Tipsheet: Debt and Deficitīudget deficits have declined sharply in recent years, down from about 10 percent of the U.S. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |