Washington, D.C. – U.S. Senators Michael Bennet (D-CO), Brian Schatz (D-HI), Sheldon Whitehouse (D-RI), Patty Murray (D-WA), and Chris Van Hollen (D-MD) today reintroduced 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. U.S. Senate Majority Leader Mitch McConnell, Minority Leader Chuck Schumer, Speaker of the House of Representatives Nancy Pelosi, and House Minority Leader Kevin McCarthy are meeting today to discuss addressing the debt limit, among other topics.
“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,” 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.”
“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,” Schatz said. “It’s time to stop these attempts to govern through threats and defuse the bomb by eliminating the debt ceiling altogether.”
“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,” Whitehouse said.
“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,” Murray said. “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.”
“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,” Van Hollen said.
In practice, the debt limit – or debt ceiling – has no impact on deficits or 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 or suspend the ceiling before it is reached, a politicized procedure that has led in the past to threats of defaulting on the government's obligations to pay its bills. Failing to pay America’s bills on time and in full could lead to a financial crisis that would cause massive damage on Main Streets 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.