The U.S. Treasury/ Photo by Micah Clemens

A few glimmers of hope came from Washington in recent months. Lawmakers agreed on a bipartisan budget resolution. They passed a budget that funds the government through the rest of fiscal 2014. And they’ve already agreed on spending levels for 2015.

Then there’s the debt ceiling.

The debt ceiling is the legal limit Congress places on its own borrowing. Every time the federal debt reaches the debt ceiling, lawmakers have to pass a law to raise the limit in order to prevent the government from defaulting on its loan payments – or reneging on any number of other obligations, like sending out Social Security checks.

The debt ceiling doesn’t authorize new spending. It just allows the government to pay the bills on spending that Congress has already authorized. And as President Obama has said, failing to raise the debt ceiling is like going out to fancy restaurant and ordering a nice dinner – then walking out on the check.

The Last Debt Ceiling Deal

In the deal that ended the government shutdown back in October, lawmakers suspended the debt ceiling until Feb. 7.

Debt Ceiling in 2014

After Feb. 7 the Treasury will have to use accounting maneuvers to prevent a debt default. Treasury Secretary Jack Lew said Congress should take immediate action to prevent a crisis by raising the debt ceiling.

Republicans have signaled that they won’t vote for an increase in the debt limit without demanding concessions as part of the deal. According to news reports, party leaders have discussed demanding certain changes to the Affordable Care Act, also known as Obamacare, in exchange for their vote to raise the debt ceiling. Yet in reference to a debt default, Speaker Boehner said, “We wouldn’t want to do that.”

For more on how the debt ceiling works, check out Federal Budget 101. And for updates on how the 2014 debt ceiling debate unfolds, check out our debt ceiling page.