This transcript has been automatically generated and may not be 100% accurate.

I ... the federal debt SEO it's a looming catastrophe it's a bargaining Libor ... it's a crisis averted it seems like a never ending cycle ... so what is the federal debt ceiling anyway and why should you care about ... let's start with how it works ... the government spends more money than it takes it gets done this often on since the country was founded ... but now it's doing it more than ever ... in each of the past four years ... it has spent over one trillion dollars more than it appears ... that they're wary of this year ... is projected to collect about two hundred and fifteen billion dollars in revenues ... and pay out four hundred and sixty day ... the government borrows to make up the difference ... by selling bonds to investors around the world ... nearly half of that debt is now held by foreign ... much of it by Japan and China ... it's not that the government spends more than it brings it ... that is each month that the government runs a deficit they passed the bar ... the sum of all this borrowing is the federal debt ... has been growing Paulson dollars in measured against the size of the economy ... until World War one and ... convert to devote to this time the Treasury needed to borrow money ... to get the Treasury more flexibility to Congress which defending the ceiling on the day ... in nineteen seventy ... when that their bumps up against that women in congress coffin with a lot of shouting in bargaining ... molds to lift the ceiling ... and that is where we are now ... the government hit the sixteen point four trillion dollar federal debt ceiling on December thirty first ... so Congress suspended the ceiling allowing the Treasury to borrow what it needs ... but only through May nineteen ... what you have to understand the debt ceiling is a strange thing ... first Congress votes ... to spend money the government doesn't happen ... that involves a second time ... to allow Treasury can borrow that money so we can span ... refusing to raise the debt ceiling does not cut spending ... it's like refusing to pay a credit card bill respective parties ... but because they are to raise the debt limit could be so devastating Congress often does use it ... to force the president to do things he's reluctant to do ... nobody really knows the Treasury has been precisely this position before ... but here's the rough gases ... when it released a similar circumstance back in two thousand eleven ... contemplated paying as many bills include each day with a passion that I'm here ... to link a number of ... deals will be paid basically order which they are on ... the longer the delay in raising the debt ceiling ... the more bills with our physicians or a lion Medicare payments to make payroll seniors to pay rent with some security benefits for soldiers waiting for patients ... would be forced to make do without their money for some time ... another option would be for the Treasury to prioritize and ... to some bills to pay on time and others to July ... it's unclear whether this is legal ... or logistically possible ... given the volume of deals that it ... receives each day nor is it clear whether the tape recorder would pay interest on the national debt before paying everyone out ... any delays in paying interest was indeed the government scrambling ... to customers around the world in the ability of the U S government to manage and finance ... that could lead investors to demand higher interest rates the U S Treasury bonds which would cost American taxpayers billions of dollars over time ... the statistics ... and as the debt continues to rise Washington faces a decision ... will come to an agreement on taxes and spending ... well actually do something to slow the buildup of debt ... or will the debt ceiling come back into the headlines and with it the accompanying fear that the U S government won't be able to pay its debts ...