The term "debt ceiling" refers to a legal limit on how much debt the federal government can incur. It is set by Congress and represents the maximum amount of money that the Treasury Department can borrow to finance government operations, programs, and activities. The debt ceiling does not authorize new spending or tax cuts; it simply allows the government to pay for expenditures already approved by Congress through legislation. When the federal government reaches its debt limit, it may be unable to borrow additional funds necessary to meet its obligations, which can lead to a default on its loans and have serious consequences for the economy. The debt ceiling has been a contentious issue in recent years as some lawmakers argue that it is an important tool to control government spending while others believe it should be raised to allow the government to meet its financial obligations without disruption.