Van Hollen, Schatz, Bennet, Whitehouse, Murray Introduce Legislation to Repeal Debt Ceiling
Today, U.S. Senator Chris Van Hollen (D-Md.) along with Senators Brian Schatz (D-Hawai‘i), Michael Bennet (D-Colo.), Sheldon Whitehouse (D-R.I.), and Patty Murray (D-Wash.) introduced legislation to repeal the national debt ceiling, an arbitrary limit set by Congress on the amount of funding that the United States Treasury may borrow.
“The debt ceiling is an arbitrary mechanism that has no practical impact on government spending or revenues. It has been wielded as a political weapon – but the damage would be catastrophic if we were ever pushed to default. It’s time to eliminate this destructive device altogether, and work together on bipartisan proposals to invest in our future, make the tax code fairer for working families, and address our national debt,” said Senator Van Hollen.
“It’s clear that the debt ceiling is not about fiscal responsibility, but about unnecessary brinkmanship. Congress has the chance to debate federal spending, and it’s well before the bill comes due,” said Senator Schatz. “It’s time to stop these attempts to govern through threats and defuse the bomb by eliminating the debt ceiling altogether.”
“No one should ever be able to use the full faith and credit of the United States as a political bargaining chip, but every day the debt limit exists is a day we risk that happening,” Senator Bennet said. “Eliminating the threat of default by getting rid of the debt limit would focus the important conversation about deficits and debt where it belongs – on setting spending and tax policy, instead of suggesting we’ll walk out on the tab when the bill comes due.”
“The debt limit is like setting a bear trap in the bedroom. It offers no benefit, but threatens significant damage. With any luck, Congress avoids snapping the trap, but if we ever did, there would be terrible harm. It’s time to get rid of this high-risk/low-reward hazard, and implement budget reforms to encourage bipartisan work on deficit reduction,” said Senator Whitehouse.
“It is time to end the debt limit as a political weapon. Ending brinksmanship was a priority of mine when I was Chairman of the Senate Budget Committee, and that is something we need to continue to push for,” said Senator Murray. “Democrats will not pay a price for simply allowing the government to pay its bills – particularly after Republicans put another $2 trillion on the charge card last Congress with its irresponsible tax bill.”
In practice, the debt limit has no impact on government spending, which is authorized and approved through the federal budget and appropriations process. Instead, the ceiling restricts the U.S. Treasury from paying for expenditures already made by Congress. This disconnected process consistently requires Congress to raise the ceiling before it is reached, a politicized procedure that often leads to threats of defaulting on the government’s obligation to pay its bills, leading to potential financial disruptions that would cause massive damage to local economies across the country.
The United States is one of only two democratic countries with a statutory debt ceiling, and the only one that could single-handedly cause a global recession. Since 1960, Congress has acted more than 75 separate times to raise, temporarily extend, or revise the definition of the debt limit. In 2011, the crisis surrounding raising the debt ceiling led credit rating agency Standard & Poor’s to downgrade the U.S. government’s credit rating for the first time ever.
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