The legal limit on how much the US government is allowed to borrow, which Congress has to periodically raise.
The debt ceiling is a legal cap, set by Congress, on the total amount the US government is allowed to borrow to pay bills it has already committed to, not new spending, just covering obligations already made. Because it needs to be periodically raised to keep the government paying its existing bills, it's become a recurring political flashpoint, with standoffs over raising it occasionally pushing the country to the edge of a technical default. Even the fear of hitting the ceiling without a resolution can rattle bond markets, since US Treasury debt is treated globally as one of the safest assets that exists.
Part of the Open Bell Glossary — plain-English explanations of the terms that come up on the show. Browse every term.