The debt limit, or debt ceiling, is a restriction on how much the federal government can borrow to pay its bills and allocate funds for future investments. When Congress appropriates or directs government money to be spent, the government is obligated to pay those funds, creating a bill it must pay.
This bill, also known as the national debt[1], is the amount of money the federal government has already borrowed to cover outstanding expenses in past fiscal years. The national debt is composed of debt held by the public in the form of government securities and intragovernmental debt, debt which one part of the federal government owes to another.
