Foster Introduces Legislation to Repeal Debt Ceiling
Washington, D.C. – Today, Congressman Bill Foster (D-IL) introduced the End the Threat of Default Act, 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 bill is cosponsored by 42 Members of Congress.
“Weaponizing the debt ceiling and using it as a pawn in partisan budget negotiations is dangerous and repeatedly brings our nation to the brink of default, which would be disastrous to the U.S. economy – something we’ve witnessed as recently as 2011 when Republicans created a debt ceiling crisis that resulted in the first ever downgrade to the U.S. credit rating,” said Foster. “The government has an obligation to pay its bills. Threatening to default on our debt is the same as ordering an expensive meal at a restaurant, eating it, and skipping out without paying. We can and should have a real conversation about overall spending, but the full faith and credit of the United States must never be compromised.”
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 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.
A copy of the legislation is available here.
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