Debt Ceiling

October 1st is fast approaching, and the significance of this is that Treasury Secretary Henry Paulson told Congress on Wednesday that the federal government will hit the current debt ceiling on Oct. 1.

The current debt limit is $8.965 trillion. Unless Congress votes to raise that ceiling, the country would be unable to borrow more money to keep the government operating and to pay debt obligations coming due. The United States has never defaulted on a debt payment but the decision on whether to raise the debt ceiling often sparks a prolonged political battle in Congress.

The House approved an increase in the debt limit in May when it adopted the annual congressional budget resolution, but the full Senate has yet to act to raise the limit.

Partial excerpt from here