As another debt ceiling showdown approaches, Oregon’s Senator Jeff Merkley and Virginia’s Senator Tim Kaine introduced legislation Thursday 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 2018 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.
The idea of having the president increase the debt ceiling, subject to a vote of congressional disapproval, was originally proposed by then-Minority Leader Mitch McConnell in 2012.
“A debt default would be a disaster for our economy—and that’s exactly why we need to make sure it never happens,” said Merkley. “The use of the debt ceiling as a political hostage has led us closer to default than ever before. Continuing on the path we’re on now is all risk and no reward. We can reform this process in a way that maintains congressional oversight while de-weaponizing the debt ceiling. That’s exactly what the Protect our CREDIT Act does.”
“Playing political games with the debt ceiling has already hurt our economy and our credit rating,” said Kaine. “This bill preserves congressional input in establishing a debt limit for the United States while protecting Americans from the threat of a default.”
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.