The Debt Limit: History and Recent Increases

D. Andrew Austin
Analyst in Economic Policy

Mindy R. Levit
Analyst in Public Finance

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. 

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 ten 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. 

In 2005, reconciliation instructions in the FY2006 budget resolution (H.Con.Res. 95) included a debt limit increase. With no action having been taken by December 2005, the Secretary of the Treasury sent several letters warning Congress that the Treasury would exhaust its options to avoid default by mid-March 2006. Congress passed an increase in mid-March, which the President signed on March 20. The House's adoption of the conference report on the FY2008 budget resolution in the spring of 2007 automatically created and deemed passed legislation (H.J.Res. 43) raising the debt limit by $850 billion to $9,815 billion. The Senate approved the resolution on September 27, 2007, and it was signed by the President two days later. 

The current economic slowdown led to sharply higher estimates of the FY2008 and FY2009 deficits, which led to a series of debt limit increases. A debt limit increase was included in the Housing and Economic Recovery Act of 2008 (H.R. 3221) and signed into law (P.L. 110-289) on July 30. 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 was increased for the third time in less than a year with the passage of 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), which raised the debt limit to $12,104 billion. 

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 trillion. In August 2009, Treasury reportedly said that the debt limit would be reached in mid-October, although the Treasury later stated that the limit would not be reached until mid or late 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 trillion 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.


Date of Report: February 16, 2010
Number of Pages: 25
Order Number: RL31967
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The Organization for Economic Cooperation and Development

James K. Jackson
Specialist in International Trade and Finance

The Organization for Economic Cooperation and Development (OECD) is an intergovernmental economic organization in which the 30 member countries discuss, develop and analyze economic and social policy and shares expertise and exchanges with more than 70 developing and emerging economies. The member countries include Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States. While all of the member countries are considered to be economically advanced and collectively produce three-fourths of the world's goods and services, membership is limited only by a country's commitment to a market economy and a pluralistic democracy. In January 2010, Chile signed protocols to complete its entry into the OECD as the 31st member. The OECD has also extended invitations to Estonia, Israel, Russia, and Slovenia to open discussions for membership and it has offered enhanced engagement with a view to possible membership to Brazil, China, India, Indonesia, and South Africa. 

The member countries rely on the OECD Secretariat in Paris to collect data, monitor trends, analyze and forecast economic developments, research social changes and patterns in trade, environment, agriculture, society, innovation, corporate and public governance, taxation, sustainable development, and other areas to inform their discussions and to assist them in pursuing their efforts to develop common policies and practices. The U.S. has sparred periodically with other OECD member countries over various issues, including U.S. antidumping laws. Karen Kornbluh was appointed by President Obama to serve as the U.S. Ambassador to the OECD. Key issues for Congress include OECD work on coordinating national approaches to curtailing bribery and the illicit use of tax havens. Congress appropriated about $117 million to the OECD in FY2008.


Date of Report: February 8, 2010
Number of Pages: 11
Order Number: RS21128
Price: $29.95

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Unemployment Insurance Provisions in the American Recovery and Reinvestment Act of 2009

Alison M. Shelton
Analyst in Income Security

Julie M. Whittaker
Specialist in Income Security

The American Recovery and Reinvestment Act of 2009 (P.L. 111-5, also known as ARRA or the 2009 stimulus package) contained several provisions affecting unemployment benefits, described below. 

• ARRA temporarily increased unemployment benefits by $25 per week for all recipients of regular unemployment compensation (UC), extended benefits (EB), emergency unemployment compensation (EUC08), Trade Adjustment Assistance (TAA) programs, and Disaster Unemployment Assistance (DUA). 

• The act extended the temporary EUC08 program through December 26, 2009 (with grandfathering), to be financed by federal general revenues. The EUC08 program's expiration date has since been further extended. 

• It provided for temporary 100% federal financing of the EB program, to be financed by the federal government through the Unemployment Trust Fund. 

• ARRA allowed states the option of changing temporarily the eligibility requirements for the EB program to expand the number of persons eligible for EB benefits, to end before June 1, 2010. 

• It provided for an additional 13 weeks to the maximum amount of time railroad workers may receive extended unemployment benefits. 

• The legislation suspended income taxation on the first $2,400 of unemployment benefits received in 2009, for taxable years beginning after December 31, 2008. 

• It provided relief to states from the payment and accrual of interest on federal loans to states for the payment of unemployment benefits, from enactment of the stimulus package on February 17, 2009, through December 31, 2010. 

• ARRA provided for a special transfer of up to $7 billion in federal monies to state unemployment programs as "incentive payments" for changing certain state UC laws. All incentive payments must be made before October 1, 2011. States do not need to repay these sums to the federal government. Any changes that states make to state unemployment programs as a result of ARRA's modernization provisions would be permanent. 

• Finally, the act transferred a total of $500 million to the states for administering their unemployment programs, within 30 days of enactment of the 2009 stimulus package. States do not need to repay these sums to the federal government. 

This report addresses some of the more common questions about unemployment insurance in the 2009 stimulus package as Congress approved it in February 2009. The report does not provide operational details of unemployment insurance programs such as UC, EB, or EUC08, nor does it address the TAA or DUA programs. 

Since ARRA's passage, certain elements of the package have been authorized for additional months and the EUC08 program has been expanded to include additional benefit tiers. For more information, see CRS Report RL33362, Unemployment Insurance: Available Unemployment Benefits and Legislative Activity, by Julie M. Whittaker and Alison M. Shelton.

This report will not be updated. .


Date of Report: February 17, 2010
Number of Pages: 12
Order Number: R40368
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The Financial Action Task Force: An Overview

James K. Jackson
Specialist in International Trade and Finance

The National Commission on Terrorist Attacks Upon the United States, or the 9/11 Commission, recommended that tracking terrorist financing "must remain front and center in U.S. counterterrorism efforts" (see The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States, U.S. Government Printing Office, July, 2004. p. 382). As part of these efforts, the United States plays a leading role in the Financial Action Task Force on Money Laundering (FATF). The independent, intergovernmental policymaking body was established by the 1989 G-7 Summit in Paris as a result of growing concerns among the Summit participants about the threat posed to the international banking system by money laundering. After September 11, 2001, the body expanded its role to include identifying sources and methods of terrorist financing and has adopted nine Special Recommendations on terrorist financing to track terrorists' funds. The scope of activity of FATF has also broadened as a result of the global financial crisis, since financial systems in distress can be more vulnerable to abuse for illegal activities This report provides an overview of the Task Force and of its progress to date in gaining broad international support for its recommendations


Date of Report: February 8, 2010
Number of Pages: 9
Order Number: RS21904
Price: $29.95

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The OECD Initiative on Tax Havens

James K. Jackson
Specialist in International Trade and Finance

Since the 1990s, the Organization for Economic Cooperation and Development (OECD) has pursued the issues of bribery and tax havens, resulting in changes to certain U.S. laws. In addition, the OECD, under the direction of its member countries, spearheaded an international agreement to outlaw crimes of bribery, and it continues to coordinate efforts aimed at reducing the occurrence of money laundering, corruption, and tax havens. Also, the OECD is a pivotal player in promoting corporate codes of conduct that attempt to develop a set of standards for multinational firms that can be applied across national borders. On May 4, 2009, President Obama outlined his Administration's policy to "crack down on illegal tax evasion" and to close loopholes. In the 111th Congress, companion legislation was introduced in the House (H.R. 1265) and the Senate (S. 506) to restrict the use of tax havens. Some estimates indicate that tax havens cost the United States $100 billion each year in lost tax revenues (The Christian Science Monitor, Tax Havens in U.S. Cross Hairs, by David R. Francis, June 9, 2008). .


Date of Report: February 8, 2010
Number of Pages: 18
Order Number: R40114
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