Congress and the White House have until the end of September to raise the national debt limit before the federal government is faced with the prospect of either not paying its bondholders on time or deferring other bills. Here’s a primer on the U.S. national debt, the debt limit and interest payments on the nation’s credit line:
1As of July 31, the federal government’s total debt stands at $19.845 trillion, according to the Treasury Department’s monthly reckoning. Nearly all of it is subject to the statutory debt ceiling, which is currently set at just under $19.809 trillion. As a result, as of the end of July there was just $25 million in unused debt capacity remaining.
3Though U.S. government debt is perhaps the most widely held class of security in the world, as of the end of July 27.6% of the debt (about $5.48 trillion) is owed to another arm of the federal government itself. The single biggest creditors, in fact, are Social Security’s two trust funds, which together held more than $2.9 trillion in special non-traded Treasury securities, or 14.7% of the total debt. (Social Security revenues exceeded benefit payments for many years; the surplus was required by law to be invested in Treasuries.) Another big holder: the Federal Reserve system, which as of early August collectively held nearly $2.5 trillion worth of Treasuries, or 12.4% of the total debt. (The Fed’s holdings are included in the “debt held by public” category.)
BONUS FACT: Though many people may believe that “China owns our debt,” as of June (the latest month available), mainland China only held about 5.8% of the total debt, or about $1.15 trillion. (Hong Kong, a “special administrative region” of China, held another $202.6 billion.) China was the top foreign holder of Treasury securities, ahead of Japan, which held just under $1.1 trillion.
Note: This is an update to a post originally published on Oct. 9, 2013.