In 1917, the US Government passed a law that set a limit on the total amount of debt that the government can incur – initially set at $11.5bn. However Government debt has increased under every President and now stands at $31.4trn. In January this year debt hit this latest level which means that the Government cannot legally borrow anymore money. In order to increase the debt ceiling it must be voted through the House of Representatives which the Republicans have a majority. Although the ruling party is the Democrats, the Republican majority can pressure President Joe Biden to agree on cuts to the budget. In the past, under the same scenario, there have been hastily arranged agreements at the 11th hour to avoid a default. Below is a good video from the WSJ explaining the debt ceiling and the consequences of it not being raised.