Camp Announces Debt Limit Hearing

In announcing the hearing, Chairman Camp said, "The Congress created the debt limit as a check on the delegated borrowing power of the President and it is critical that all parties understand the implications of increasing the debt limit. This hearing will examine the role and purpose of the debt limit, review past practices regarding its increase, and explore solutions that ensure responsible management of the government's finances."

BACKGROUND:

The U.S. Constitution grants Congress the authority to fund government, including the power to "lay and collect taxes," and to "borrow [m]oney on the credit of the United States." Congress provided the President with a limited delegation of borrowing authority in 1917, and created the first statutory aggregate debt limit in 1939 to pay obligations authorized by Congress.

As of December 2012, the public debt is currently at the statutory limit of $16.4 trillion, and the U.S. Department of the Treasury (Treasury) is currently operating under "extraordinary measures" that give it additional, but limited, means to manage funds. According to Treasury, it is expected that the government's ability to meet its current obligations will be exhausted between mid-February and early March of this year.