How Much Should the Debt Limit Be Raised?

How Much Should the Debt Limit Be Raised?

Under current policy, the debt subject to limit is projected to increase throughout the remainder of
the decade. Under President Obama’s FY2013 budget proposals, it is projected to reach $25,936
billion at the end of FY2022.
68
 This represents an increase of roughly $900 billion to $1 trillion in
each fiscal year during the FY2013 to FY2022 period. Increases in debt subject to limit at this
level occur even as the budget deficit is projected to decline, in nominal dollars, between FY2013
and FY2015. Between FY2016 and FY2019, the budget
deficit is projected to remain roughly
stable, before rising thereafter.
69
 In other words, the debt subject to limit increases even if the
budget deficit declines in nominal terms as issuing debt would still be required to finance federal
spending in excess of federal revenues (i.e., budget deficits).
According to the figures provided in the Hous
e Budget Committee report (H.Rept. 112-421)
accompanying the House FY2013 Budget Resolution (H.Con.Res. 112, 112
th
 Congress) agreed to
on March 29, 2012, the debt subject to limit is projected to rise from $17,073 billion at the end of
FY2013 to $21,627 billion at the end of FY2022. This
means that if the policies contained in the
House-passed budget resolution are enacted, the debt limit would have to increase by $4,554
billion (or roughly $500 billion in each fiscal year) during the FY2013 to FY2022 period.
Given the borrowing requirements under both
the President’s FY2013 budget and the House-
passed budget resolution, the current estimates stipulate the increases in the debt limit that would
be required. However, depending on the spending and revenue proposals that may be
subsequently enacted, borrowing requirements could change going forward. These borrowing
requirements will dictate the level of debt and subsequent future increases in the debt limit. How
often Congress wishes to reconsider statutory debt limit legislation typically affects the level at
which the debt limit is set.