Leaders.com
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
Business debt ceiling

U.S. Treasury Secretary Janet Yellen warned lawmakers that a decision needs to be made soon. (Photo by Kevin Dietsch/Getty Images)

By Hannah Bryan Leaders Staff

Hannah Bryan

News Writer

Hannah Bryan is a news writer for Leaders Media. Most recently she was a reporter for the Sanilac County News...

Full bio


Learn about our editorial policy

Jan 17, 2023

The Debt Ceiling And Why It Matters

The U.S. is about to hit its debt limit earlier than expected, federal lawmakers are feuding about whether or not to raise the limit. 

Key Details

  • By January 19, the U.S. will reach its debt limit. U.S. Treasury Secretary Janet Yellen will invoke what the Treasury calls extraordinary measures to allow the U.S. government to continue operations.
  • These methods will extend the deadline to raise the ceiling until June. 
  • Secretary Yellen’s plans are to redeem investments from various retirements—including the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund—and temporarily stop making new investments in these funds. 
  • The Treasury Department will also pause investment in the Federal Employees Retirement System Thrift Savings Plan and the Government Securities Investment. 
  • Congress must now decide whether or not to raise the debt ceiling, but the two parties are strongly divided. 
  • The debt ceiling was last raised in 2021 to around $31.4 trillion. 
  • If no agreement is reached, it could trigger a government shutdown. The last government shutdown was in 2019. During a shutdown, non-essential government employees are furloughed while essential workers work without pay. When the shutdown is resolved, workers will receive back pay. Some government services may also be temporarily suspended during a shutdown. 

Why it’s important

The debt ceiling is a tool that allows the federal government to more easily access needed funding. This limit is the total amount the government can borrow to cover the cost of services such as Social Security, Medicare, military salaries, tax refunds, and other payments.

Raising the debt limit was not always a political issue. The routine procedure became a hotly debated issue in 1953 when President Dwight Eisenhower requested an increase in order to further fund his national highway system. Since then, raising the ceiling has had the potential to be a contentious issue, though it is often raised without much fight. 

The most significant disagreements resulted in temporary government shutdowns in 1995 and 1996. In 2011, Congress once again struggled to raise the limit and the U.S. government’s credit rating declined for the first time. The debt ceiling was actually suspended for the first time in 2013 after parties could not come to an agreement.

Republican Speaker of the House Kevin McCarthy is attempting to negotiate a cap on government spending. The White House on the other hand has indicated that there will be no negotiations.

In exchange for raising the debt ceiling, Republicans are asking for spending decreases and reforms in several key areas including Medicare and Social Security. Comments from Speaker McCarthy indicated that the GOP is prepared to buckle down on these demands as he told Fox News, “one of the greatest threats we have to this nation is our debt.”

The opposition isn’t likely to give in quickly either. White House Press Secretary Karine Jean-Pierre told reporters last week that the question of raising the debt limit shouldn’t be filed with negotiations, saying it “should be done without condition.” 

Home / News / The Debt Ceiling And Why It Matters
Share
FacebookTweetEmailLinkedIn

Related Stories

Wall Street Makes $100 Billion Bet on Weight Loss Pills

by PJ Howland Leaders Staff
Investing

Oct 25, 2023

Ozempic

Investor optimism around a potential blockbuster obesity drug by Structure Therapeutics led to soaring share prices across the weight-loss pharma sector.

Key Details

  • Structure Therapeutics' stock jumped 35% after reporting positive results from early clinical trials of a once-daily weight-loss pill.
  • The experimental drug helped participants lose about 5% of their body weight over one month without side effects, although there are concerns with Ozempic.
  • Analysts predict the global anti-obesity medication market could reach sales of $100 billion by 2030, up from $71 billion currently.
  • With promising growth prospects, investors are betting on companies developing new weight loss drugs like Structure, Eli Lilly, Novo Nordisk, and Pfizer.

Go deeper

FacebookTweetEmailLinkedIn

Seattle Takes The Crown For Advanced Tech Talent

by PJ Howland Leaders Staff
Tech

Oct 24, 2023

Seattle tech talent

Seattle has emerged as the metro area with the most advanced tech talent, beating out tech hubs like San Francisco and Silicon Valley.

Key Details

  • According to a new ranking by the Burning Glass Institute, Seattle has the highest proportion of advanced tech workers compared to other cities with similarly sized tech workforces.
  • The ranking evaluated 60 million high-paying, in-demand tech job postings and histories to identify cities with cutting-edge roles like AI and cybersecurity rather than legacy tech positions.
  • With tech giants Amazon and Microsoft headquartered in Seattle, the city edged out the San Francisco Bay Area, Boston, Austin, and Raleigh on the list.
  • The report found that demand for software developers and IT support specialists has declined over the past five years as companies seek more specialized tech talent.

Go deeper

FacebookTweetEmailLinkedIn

More Americans Can’t Keep Up With Car Payments

by Colin Baker Leaders Staff
Loans and Borrowing

Oct 23, 2023

car loans, used cars

A record number of Americans are behind on their car loan payments as higher interest rates and prices weigh on consumers.

Key Details

  • According to data from Fitch Ratings, 6.11% of car loans were at least 60 days delinquent in September, the highest since tracking began in the early 2000s.
  • Some interest rates on used cars can rise to as much as 21%, according to Bankrate.
  • Soaring prices and rising interest rates are squeezing consumers, making it difficult for some to keep up with their auto loans.

Go deeper

FacebookTweetEmailLinkedIn
Chevron Gas Deal
Markets

Oct 23, 2023

Chevron Makes $53 Billion Deal Amid Surging Gas Prices

by PJ Howland Leaders Staff
nike logo
Company Culture

Oct 20, 2023

Nike to Require More In-Office Days From Employees

by Colin Baker Leaders Staff
blue collar workers
Retirement

Oct 20, 2023

Explaining The ‘C+ Grade’ Retirement Ecosystem in The United States

by PJ Howland Leaders Staff

Recent Articles

Hiring

Nov 1, 2023

Learn the Winning Answers to the Most Common Phone Interview Questions

Come to your next phone interview fully prepared

Personal Growth

Oct 30, 2023

85 Quotes on Self-Love to Boost Your Self-Esteem

Don’t fall into the trap of harsh self-criticism

Company Culture

Oct 27, 2023

What is a Sabbatical? Your Ticket to Restful Growth and Meaning

Sabbaticals can benefits both employees and businesses

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2025 Leaders.com - All rights reserved.

Search Leaders.com