Fitch cautioned that a downgrade could also result from the absence of a plan to bring down the deficit in the medium term. On January 15, 2013, Fitch Ratings warned that delays in raising the debt ceiling could result in a formal review of its credit rating of the U.S., potentially leading to it being downgraded from AAA. The ceiling was last set at $16.4 trillion in 2011. Rather, it is a limit on the ability to pay obligations already incurred." It does not prohibit Congress from creating further obligations upon the United States. According to the Government Accountability Office, "The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. The debt ceiling is part of a law (Title 31 of the United States Code, section 3101) created by Congress. The debt ceiling had technically been reached on December 31, 2012, when the Treasury Department commenced "extraordinary measures" to enable the continued financing of the government. The crisis ended on Octowith the passing of the Continuing Appropriations Act, 2014, although debate continues about the appropriate level of government spending, and the use of the debt ceiling in such negotiations.Īfter the passing in early January 2013 of the American Taxpayer Relief Act of 2012 to avert the projected fiscal cliff, political attention shifted to the debt ceiling. During the crisis, approval ratings for the Republican Party declined. The US Treasury began taking extraordinary measures to enable payments, and stated that it would delay payments if funds could not be raised through extraordinary measures, and the debt ceiling was not raised. They refused to raise the debt ceiling unless President Obama would have defunded the Affordable Care Act (Obamacare), his signature legislative achievement. Members of the Republican Party in Congress opposed raising the debt ceiling, which had been routinely raised previously on a bipartisan basis without conditions, without additional spending cuts. It began in January 2013, when the United States reached the debt ceiling of $16.394 trillion that had been enacted following the crisis in 2011. The ongoing political debate in the United States Congress about the appropriate level of government spending and its effect on the national debt and deficit reached a crisis that was centered on raising the debt ceiling, which is normally raised without debate.
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