On Jan. 23 the Housed passed legislation to deal with the debt ceiling – the legal limit Congress places on its own borrowing. If the federal debt reaches the debt ceiling, the government is unable to borrow additional funds to support continued operations, triggering a government shutdown and default on existing loans. Raising the debt ceiling doesn't grant the government permission to spend money on new things – instead, it lets the government borrow additional funds to support spending that's already been authorized. Congress has the authority to raise the debt ceiling as needed.
The legislation – known officially as the "No Budget, No Pay" bill – doesn't actually raise the debt ceiling above the current $16.4 trillion limit. Rather it suspends debt ceiling calculations through May 18, 2013, and then raises the debt ceiling to whatever level it is on that date, unless Congress acts before that to enact a new limit. The May 18 date isn't tied to any milestone or deadline – it's an arbitrary date selected by the House Republican leadership to provide what they hope will be sufficient time to reach a long-term deal.
The official title of the bill comes from provisions which state that if either the House or Senate fail to enact a budget resolution by April 15, pay for members of that house will be withheld. These provisions were included by the House because the Senate has failed to enact a budget resolution for the last four years. Sen. Patty Murray (D-WA), the new chair of the Senate Budget Committee, has stated that it is her intention that the Senate will pass a budget resolution this spring.
For more information on the debt ceiling and other issues now confronting Congress, check out NPP's "Federal Budget Timeline: Beyond the Fiscal Cliff in 2013."