Kaine & Merkley Statement on Need to Avert Debt Default
WASHINGTON, D.C. — Today, U.S. Senators Tim Kaine (D-VA) and Jeff Merkley (D-OR) released the following statement after the United States hit its debt limit—the technical limit on how much it can borrow to pay debt incurred over the past few decades—and began extraordinary measures:
“Congress has an urgent responsibility to pass legislation to keep our country from defaulting on its debt incurred under Republican and Democratic Administrations. If we fail to do so because of irresponsible political brinksmanship, we’ll see higher borrowing costs, a financial crisis, and basic government functions thrown into chaos, from Medicaid and Social Security to servicemember pay and food safety inspections. This threatened crisis shows why we need to pass our PROTECT Our Credit Act, which would help prevent any party from holding the debt limit hostage for political gain. Rather than playing political games with something as important as the debt limit, we should be taking default off the table.”
In response to the increasing politicization of the debt limit, Kaine and Merkley’s Protect Our CREDIT Act would reform the process of raising the debt ceiling by making the following changes:
- Requiring 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.
- Raising the debt ceiling 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.
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.