WASHINGTON, D.C. – As another debt ceiling showdown approaches, Oregon’s U.S. Senator Jeff Merkley and U.S. Senator Tim Kaine (D-VA) today introduced legislation aimed at ending Congress’ abuse of the debt ceiling as a political hostage. The Protect our Citizens from Reckless Extortion of our Debt and Irresponsible Tactics (Protect our CREDIT) Act of 2021 would change how the debt ceiling is raised, enabling the executive branch to initiate a process to raise the debt ceiling subject to a congressional override.
The legislation would help prevent political brinksmanship like that of standoffs in 2011 and 2013, when some in Congress threatened to force the United States to default on its debt unless separate political demands were met. During the 2011 standoff, the United States came perilously close to a default and the stock market took its largest plunge since the 2008 financial crisis. The rating agency Standard & Poor’s downgraded the U.S.’s credit rating for the first time in history.
Now, Senate Republicans are again imperiling the U.S. economy by vowing to filibuster House-passed legislation that would raise the debt limit, prevent a government shutdown, and fund disaster relief in the wake of catastrophic wildfires, hurricanes, and flooding.
“A debt default could be like a nuclear bomb exploding our economy—and that’s exactly why it’s time to take that possibility off the table,” said Merkley. “The use of the debt ceiling as a political hostage has led us closer to default than ever before, and even despite the damage to our credit rating from past debt limit showdowns, Republican politicians are still willing to flirt with disaster to play politics. Continuing on the path we’re on now is all risk and no reward. It’s possible to maintain congressional oversight while de-weaponizing the debt ceiling, and that’s exactly what the Protect our CREDIT Act does.”
“Failing to pay the bills America owes would hurt our economy, raise mortgage and borrowing costs, and threaten payments for Social Security recipients, veterans, and others,” said Kaine. “It’s long past time to enact changes to ensure that never happens.”
The idea of having the President increase the debt ceiling, subject to a vote of congressional disapproval, was originally proposed by Senate Minority Leader Mitch McConnell in 2011 to allow the much needed debt limit increase to go forward without requiring Republicans to take an affirmative vote. McConnell’s proposal was incorporated into the Budget Control Act of 2011, which passed in August 2011 and authorized the President to increase the debt ceiling in three installments. Under this system, Congress had the option to override the President’s action by passing a joint resolution of congressional disapproval. Though Senator McConnell introduced two joint resolutions of disapproval in August 2011 and January 2012, they were never passed by Congress and the debt ceiling increase was allowed to go into effect.
Making this process for raising the debt ceiling permanent would end the use of the debt ceiling as a tool for political blackmail, and protect the United States from the dire ramifications of a potential default. This procedural move is needed to save the economy, and Congress should embrace it.
The Protect our CREDIT Act would reform the process of raising the debt ceiling by making the following changes:
- The Protect our CREDIT Act requires the President to initiate a process, prior to the beginning of the fiscal year, to determine the amount of debt necessary for that year and propose a new debt limit based on the amount of spending authorized and appropriated by Congress.
- The debt ceiling would be raised to the proposed limit unless, within 15 legislative days, Congress passes and the President signs a joint resolution of disapproval.
- If, during the year, the federal debt gets within $250 billion of the limit, the President shall submit another written certification, explaining what drove the need for additional debt and proposing a new debt limit for the remainder of the fiscal year, subject to the same congressional disapproval process.