As August 2 approaches, you'll likely hear increasingly urgent debate over the nation's debt ceiling. That's the approximate date by which the Treasury estimates it will no longer be able to borrow under the current $14.3 trillion limit. Treasury officials have warned that if the Treasury can no longer borrow money, the U.S. might default on its existing obligations--in other words, be unable to make payments it already owes, whether those be for Treasury securities or government programs.
President Obama, Treasury Secretary Timothy Geithner, and Federal Reserve Chairman Ben Bernanke have warned that not raising the debt limit would have severe consequences. Leaders of both parties have said that the issue must be addressed, and have put forward proposals for tying any increase to tackling the country's budget deficit. However, they differ on how to begin to reduce that deficit.
While the debate is taking place right now, here are some answers to frequently asked questions that might help you understand the issues involved.