Definition of debt ceiling
The maximum amount of debt that a person or entity is permitted to run up.
The US debt ceiling explained
The US debt ceiling. The ceiling was originally established during the first world war to allow the US government to raise money without getting approval for each borrowing. Brinkmanship over lifting the debt ceiling brought the US to the edge of sovereign default in 2011, prompting an unprecedented ratings downgrade on the US's debt by Standard & Poor's. By the beginning of 2013 the debt ceiling was again overshadowing US affairs as the the US neared its statutory debt limit. Republicans were looking to extract cost cuts as payback for the tax raises agreed in the US fiscal cliff deal reached on January 1 2013 and were intending to use the requirement for congressional approval to lift the country's borrowing limit as leverage to force the cuts through.