The federal debt hit 40 trillion dollars for the first time in September, bumping up against the 41.1 trillion dollar ceiling written into the Republican Party’s 2025 budget reconciliation law, and the question of what Congress does about it is now one of the live issues of the lame-duck session. The debt limit is under discussion as Republicans weigh acting before losing control of Congress in January.
The Bipartisan Policy Center said the Treasury is likely to hit its maximum borrowing capacity by mid-summer, and Bank of America estimates the United States may no longer be able to meet all its obligations by November 2027. The debt ceiling, which analysts say could be reached in the first half of 2027, is one of the items the returning lawmakers must decide whether to tackle before Democrats take over in January.
A lame-duck decision
The returning lawmakers face a crowded calendar. Voters gave Democrats control of Congress in the November 3 midterm elections, but Republicans will remain in charge of both chambers during the lame-duck session that spans November and December. Lawmakers must pass a government funding bill before December 11 to avoid another shutdown, and the debt ceiling is one of the items that could be dealt with at the same time — or left for the new Congress.
The most likely outcome on funding is a short-term continuing resolution that kicks the fight into January, when Democrats control the gavels. Senator Patty Murray of Washington, the presumptive chair of the Appropriations Committee in the new Congress, has made the posture clear: Democrats are unlikely to negotiate a full year of government funding before the new Congress is sworn in. The same logic may apply to the debt limit, with Democrats preferring to handle it on their own terms in the new year.
Why it matters
The debt ceiling is a legal cap on how much the federal government can borrow to meet obligations it has already incurred, including Social Security payments, military salaries and interest on the national debt. When the Treasury hits its maximum borrowing capacity, it can use extraordinary measures for a time, but eventually it would be unable to pay all its bills on time.
The last major debt limit fight was resolved in the 2025 budget reconciliation law, which set the ceiling at 41.1 trillion dollars. With the debt already at 40 trillion dollars, the headroom is about 1.1 trillion dollars — a gap that will close as the government continues to borrow. The lame-duck session, expected to last roughly four to five weeks, is the last chance for the outgoing Republican majorities to address the issue before the new Congress takes over on January 3.
Related reading: Congress Lame-Duck Day Two: Leadership Vote and December 11 Deadline
