Although the US has raised its debt ceiling many times before 2011,[128] these increases were not

generally coupled with an ongoing global economic crisis.[citation needed]

December 16, 2009: The debt ceiling was exceeded. To avoid default, the Treasury Department used "extraordinary accounting tools" to enable the Treasury to make an additional $150 billion available to meet the necessary federal obligations.[128] February 12, 2010: Increase in the debt ceiling signed into law by President Obama, after being passed by the Democratic 111th United States Congress. It increased the debt ceiling by $1.9 trillion from $12.394 trillion to $14.294 trillion.[36][129] February 18, 2010: Obama issued an Executive Order to establish the National Commission on Fiscal Responsibility and Reform, also known as the Bowles-Simpson Commission. The mission of the Commission was to propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. It was tasked to issue a report with a set of recommendations by December 1, 2010.[30] November 2, 2010: The Republican Party gained 63 seats in the US House of Representatives in the United States midterm elections, recapturing the majority by 242 193 in the 112th Congress.[130] Major planks for the House Republicans during the election campaign were cutting federal spending[131] and stopping any tax increases.[132] December 1, 2010: The Bowles-Simpson Commission on Fiscal Responsibility and Reform issued its report, but the recommendations failed to win support of at least 14 of the 18 members necessary to adopt it formally.[133][134] The recommendations were never adopted by Congress nor President Obama. January 6, April 4, and May 2, 2011: Secretary of the Treasury Timothy Geithner sent letters requesting an increase in the debt ceiling.[38][135][136] January 25, 2011: Senator Pat Toomey introduces the Full Faith And Credit Act bill[50] [S.163[49]] that would require the Treasury to prioritize payments to service the national debt over other obligations. The bill was never debated. January 28, 2011: Moody's Investors Service said it may place a "negative" outlook on the AAA rating of US debt sooner than anticipated, as the country's budget deficit widened.[137] February 14, 2011: Obama released his budget proposal for fiscal year 2012.[138] Republicans criticized the budget for doing too little to rein in the burgeoning US deficit.[139] The CBO analysis, released in April 2011, estimated that the budget would increase total deficits over 10 years by $2.7 trillion: from $6.7 trillion of the March 2011 baseline to $9.4 trillion with the proposed budget.[140] The Senate rejected the budget proposal on May 25, 2011 (see below). April 14, 2011: Both the House of Representatives and the Senate voted in favor of the 2011 US federal budget, 260167 and 8119 respectively. This budget projected the 2011 deficit to be $1.645 trillion, and therefore ensured that the debt ceiling would be hit during this fiscal year. April 15, 2011: On a party-line vote 235193, the House of Representatives passed the Republican 2012 budget proposal aimed to reduce total spending by $5.8 trillion and reduce total deficits by $4.4 trillion over 10 years compared to the current-policy baseline.[141] It included reform to Medicare and Medicaid entitlement programs, which the Democrats criticized as an attempt to leave seniors and poor holding the bag on health care costs. The criticism resonated with the many in the public, who voiced opposition to

the proposed changes.[142] The Senate rejected the budget proposal on May 25, 2011 (see below). April 18, 2011: Standard & Poor's Ratings Services revised its outlook on the US to negative due to recent and expected further deterioration in the US fiscal profile, and of the ability and willingness of the US to soon reverse this trend. With the negative outlook, S&P believed there is a likelihood of at least one-in-three of a downward rating adjustment within two years.[32] May 16, 2011: The debt ceiling is reached. Treasury Secretary Timothy Geithner issued a debt issuance suspension period, directing the Treasury to utilize "extraordinary measures" to fund federal obligations.[3] May 18, 2011: Bipartisan deficit-reduction talks among the "Gang of Six" high-profile Senators are suspended when Republican Tom Coburn drops out.[143] May 24, 2011: Vice President Joe Biden and four Democratic lawmakers begin meeting with the Republican House Majority Leader Eric Cantor and the Republican Senate Minority Whip Jon Kyl, in an effort to continue the talks. Cantor said that these talks would lay the groundwork for further discussions between President Obama, Republican Speaker of the House John Boehner, and other leaders of Congress.[144] May 25, 2011: The Senate rejected both the Republican House budget proposal, by a vote of 5740, and the Obama budget proposal, by a vote of 970.[145] May 31, 2011: The House voted on a bill to raise the debt ceiling without any spending cuts tied to the increase. President Obama asked Congress to raise the debt ceiling in a 'clean' vote that included no other conditions. The bill, which would have raised the debt ceiling by $2.4 trillion, failed by a vote of 97318. Democrats accused Republicans of playing politics by holding a vote they knew would fail.[146] June 23, 2011: Biden's negotiations on the debt ceiling were cut off when both Eric Cantor and Jon Kyl walk out over disagreements on taxes.[147] July 19, 2011: The Republican Majority in the House brought the Cut, Cap and Balance Act (H.R.2560),[148] their proposed solution to the crisis, to a vote. They passed the bill by a vote of 234190, split closely along party lines: 229 Republicans and 5 Democrats 'for', 181 Democrats and 9 Republicans 'against'; it was sent to the Senate for consideration. The Bill authorized that the debt ceiling be raised by $2.4 trillion after a Balanced Budget Amendment was passed by Congress. Since Constitutional amendments require a twothirds majority vote in both chambers of Congress to pass, a vote for a Balanced Budget Amendment would require more support than the Cut, Cap and Balance Act bill achieved in the House vote.[149] July 22, 2011: The Senate voted along party lines to table the Cut, Cap and Balance Act; 51 Democrats voting to table it and 46 Republicans voting to bring it to a debate.[150] Senate Majority Leader Harry Reid called the Act "one of the worst pieces of legislation to ever be placed on the floor of the United States Senate." Even had it passed Congress, Obama had promised to veto the bill.[151] July 25, 2011: Republicans and Democrats outlined separate deficit-reduction proposals.[9] July 25, 2011: Obama and Speaker of the House John Boehner addressed the nation separately over network television with regards to the debt ceiling.[152] July 25, 2011: The bond market is shaken by a single $850 million futures trade betting on US default.

July 29, 2011: The Budget Control Act of 2011 S. 627,[153] a Republican bill that immediately raised the debt ceiling by $900 billion and reduced spending by $917 billion, passed in the House on a vote of 218210. No Democrats voted for it, and it also drew 'no' votes from 22 Republicans, who deemed it insufficiently tough on spending cuts.[154] It allows the President to request a second increase in the debt ceiling of up to $1.6 trillion upon passage of the balanced-budget amendment and a separate $1.8 trillion deficit reduction package, to be written by a new "joint committee of Congress."[155] Upon introduction into the Senate in the evening, the bill was immediately tabled on a 5941 vote, including some Republican votes.[156] July 30, 2011: The House of Representatives voted 173246 to defeat Senate Majority Leader Harry Reid's $2.4 trillion plan to reduce the deficit and raise the debt ceiling.[157] July 31, 2011: President Barack Obama announced that leaders of both parties had reached an agreement to lift the debt ceiling and reduce the federal deficit. Separately, House Speaker John Boehner told Republicans that they had reached the framework for an agreement.[158] Boehner revealed details of the agreement in a presentation to the House Republicans.[159] August 1, 2011: The House passed a bipartisan bill by a vote of 269161. 174 Republicans and 95 Democrats voted 'yes'; 66 Republicans and 95 Democrats voted 'no'.[160] August 2, 2011: The Senate passed the bill by a vote of 7426. 28 Republicans, 45 Democrats, and 1 independent voted 'yes'; 19 Republicans, 6 Democrats, and 1 independent voted 'no'.[161] President Obama signed the debt ceiling bill the same day, thus ending fears of a default. Obama also declared that the bill is an "important first step to ensuring that as a nation we live within our means."[162] August 2, 2011: The date estimated by the Department of the Treasury that the borrowing authority of the US would be exhausted, if the debt ceiling crisis were not resolved.[3] August 5, 2011: Standard & Poor's lowered the credit rating of the United States from AAA to AA+,[109][112] deciding that the budget plan that was passed did not go far enough to address the country's debt. It also warned that it is pessimistic about the nation's fiscal outlook.[163] August 9, 2011. The US Federal Reserve announced it will keep interest rates at "exceptionally low levels" at least through mid 2013; it made no commitment for further quantitative easing. (Reuters) The Dow Jones Industrial Average and the New York Stock Exchange as well as other world stock markets, recovered after recent falls. (Wall Street Journal) August 15, 2011: The date estimated by the Fitch rating agency and the FRBNY primary dealer Jefferies & Co that $29 billion of federal debt interest would have become due, thus triggering a technical sovereign default if the debt ceiling crisis had not been resolved. This, however, did not occur as the debt ceiling crisis was resolved by then.