The debt ceiling was injected to already-difficult shutdown negotiations as President-elect Donald Trump tries to clear the legislative runway for when he takes office next month with a packed agenda.
Trump rejected a bipartisan deal to avoid a government shutdown earlier this week and has included a demand to lift or suspend the debt limit -- a cap on what the federal government can borrow -- for two years, until Jan. 30, 2027.
The move to suspend it for two years failed in its first attempt on Thursday night but has reignited debate over what to do with the limit on federal borrowing and whether the cap should even continue to be in place. Democrats have frequently floated eliminating the debt limit in recent years as brinksmanship in negotiations has gotten closer to America defaulting on its bills for the first time ever.
"I agree with President-elect Trump that Congress should terminate the debt limit and never again govern by hostage taking," Sen. Elizabeth Warren, D-Mass., said in a post on X.
"The Democrats have said they want to get rid of it. If they want to get rid of it, I would lead the charge," Trump said.
The debit limit was created in 1917 to control the amount of money the government can borrow and has frequently been used by minority parties in Congress to draw political concessions from the White House. Republicans most recently used the debt limit as a bargaining chip in budget negotiations with President Joe Biden, bringing the U.S. close to its first-ever default and eventually extracting some spending cuts during negotiations last summer.
The debt limit was suspended during the 2023 deal with Biden until Jan. 1, 2025, at which point the limit will be raised to match the amount of debt issued by the Treasury Department. But Treasury can use accounting maneuvers referred to as "extraordinary measures" to avoid a default until an "X date," when the government actually runs out of money to pay its bills.
Estimates on when the U.S. will reach its X date fall sometime in the middle of next year, which could present a serious obstacle to Trump's policy agenda early during his term if it results in a drawn-out fight. The president-elect has called the ticking clock a "nasty TRAP."
The U.S. has never reached its borrowing cap, but it came close last summer and had economists warning of disastrous consequences. Some of the predictions included a 2008-style economic recession, roiling global stock markets and further downgrades to the United States' credit rating that would make it more expensive to borrow money in the future.
The warnings of disastrous outcomes have not been persuasive to spending hardliners in Congress that have been willing to withhold votes and reject raises to the cap regardless of who is in office. Dozens of Republicans defied Trump's demand to include an increase to the debt ceiling by voting against the deal on Thursday and vowed to not relent.
"They don't have a better alternative. They see the numbers and even though they are vocal and they make some good economic arguments, they don't tend to have the numbers on their side to do much of anything else except play with the most extreme measures, which the debt ceiling is," said David McLennan, a political science professor and director of the Meredith poll.
While some lawmakers support leaving the debt ceiling in place to keep government spending under control, there are questions as to how effective it is as a tool to achieve that goal. The debt ceiling has been repeatedly raised under Republican and Democratic administrations over the years as spending outpaced what the federal government takes in.
By the time the debt limit is reached, most of the spending that needs to be covered are policies that have already been passed into law, meaning that suspending or raising the ceiling only allows the government to pay the bills it owes.
The nonpartisan Congressional Budget Office has found that the limit has not been an effective tool to limit deficits.
"By itself, setting a limit on the debt cannot control deficits because the decisions that trigger borrowing are made through other legislative actions that occur largely before the debt ceiling is reached. By the time an increase is needed, it is too late to curtail federal spending or to avoid paying pending obligations without incurring negative consequences," a CBO report says.
Despite the track record of the debt limit failing to limit government borrowing, fiscal hawks and hardliner lawmakers have continued to rail against lifting the ceiling or eliminating it entirely.
"They use it as a game of chicken, and they have lost every time. Whether it be because of the real threat of the United States defaulting on debt or they try to tie it in with a government shutdown, which has never been popular either," McLennan said. "Any way they play it; it's just a very difficult political position to take and they don't get to cut spending."