Debt crosses $14 trillion mark

By Jeanne Sahadi, senior writer


NEW YORK (CNNMoney) -- The amount of U.S. debt subject to the country's legal maximum has topped $14 trillion for the first time.

On Wednesday, the amount of debt subject to the cap hit $14.001 trillion at the close of trade, according to the daily Treasury statement released on Thursday.

That means the country is less than $300 billion away from the $14.294 trillion debt ceiling, which is a cap on how much the federal government can legally borrow.

The debt ceiling has become a focal point of the debate over spending and debt. Even though congressional leaders say the cap will be raised, Republicans are vowing to use the issue as leverage to force spending cuts.

The Treasury Department estimates that borrowing could reach the cap sometime between March 31 and May 16, according to a letter Treasury Secretary Timothy Geithner sent to Congress earlier this month.

While Treasury has certain measures it can take to postpone a breach from occurring, Geithner said they would only last "several weeks."

He urged lawmakers to act soon to raise the ceiling, warning that failure to do so would be disastrous for the economy and for Americans.

Although the debt ceiling has never been reached -- so it's impossible to say definitively what would happen if it were -- budget and debt experts warn that no good can come of it.

If U.S. borrowing hits the ceiling and lawmakers fail to raise it, Treasury would be prohibited from borrowing more money. Barring immediate and draconian policy changes, the country would be unable to pay its bondholders or fund programs and benefits in full. That's because there wouldn't be enough tax revenue coming in to cover all of the country's bills.

Experts say the cascade effect would be crippling not only to the U.S. economy but very likely to economies and markets worldwide.

At a minimum, a default could pummel U.S. bonds, the dollar and U.S. investors' portfolios. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET
Sponsors

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.