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house Bill H.R. 2870

Should the Debt Limit Be Eliminated?

Argument in favor

The debt limit puts America at risk of a budget crisis because lawmakers use it as an opportunity for partisan brinksmanship. It should be eliminated altogether to ensure the federal government can always access the money it needs to fund its obligations.

SneakyPete's Opinion
路路路
08/05/2019
Keep The Debt Limit Constraints In Place To Control Spending While imperfect, the debt limit is at least a means of forcing Congress to confront the issue of runaway federal spending on a semi-regular basis. Without a debt limit, the federal government would spend itself into ruin. SneakyPete.......... 馃憤馃徎馃憤馃徎馃憤馃徎馃憤馃徎. 8.5.19..........
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burrkitty's Opinion
路路路
08/06/2019
The federal debt limit is the public policy equivalent of an appendix; it serves no practical purpose and, if ruptured, it represents a grave threat to the country鈥檚 economic and fiscal health. Some argue the debt limit provides useful leverage to extract fiscal reforms that would be hard to enact otherwise. However, this is ultimately a 鈥榯rigger鈥 that must never be pulled, so it鈥檚 of limited value.
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jimK's Opinion
路路路
08/06/2019
I have been torn on this issue because I have been looking at debt limits and budgetary allocations limits as being the same. They are not. The debt comes from commitments that our country is already bound to. Not honoring our commitments due to a spending cap is socially, economically and world-politically disruptive. Caps on allocations make a lot more sense and should be part of any legislation passed. Open-ended, multi-year allocations with some budgetary uncertainty should include a contingency budget level consistent with the uncertainty in the allocation cap. A process like this would tend to assure more accurate estimates (since they are capped), would allow strategic cost-benefit assessments of their relative priorities, and bring some discipline in looking at any new legislations true cost and its potential impact on the national debt. There are very real threats coming which may require increasing the national debt. I would like to see these threats dealt with as a strategic long-term conscious decision and not the result of simply piling on lot鈥檚 of nice to have stuff that finally results in an 鈥榦h my, our spending limit is reached鈥 moment.
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Argument opposed

While imperfect, the debt limit is at least a means of forcing Congress to confront the issue of runaway federal spending on a semi-regular basis. Without a debt limit, the federal government would spend itself into ruin.

JTJ's Opinion
路路路
08/05/2019
Congress salary should be eliminated until they do their job and balance the budget.
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Jarsh's Opinion
路路路
08/05/2019
You want to give politicians a credit card without a limit? I鈥檓 thinkin that鈥檚 not going to work out real well.
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jacklhasa's Opinion
路路路
08/05/2019
No. Stop acting like kids, and make a damn budget.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedMay 21st, 2019

What is House Bill H.R. 2870?

This bill 鈥 the End the Threat of Default Act 鈥 would repeal the public debt limit and allow the federal government to borrow money by issuing debt without limitation.

Impact

Federal spending; and the national debt.

Cost of House Bill H.R. 2870

A CBO cost estimate is unavailable.

More Information

In-DepthRep. Bill Foster (D-IL) introduced this bill to repeal the public debt limit. When he pitched this bill at the New Democrat Coalition鈥檚 Economic Policy Pitch Day, Rep. Foster argued

鈥淲hile the debt limit was originally intended to allow Congress to restrain the growth in federal debt outside the budgetary process, in practice it has been used, in the words of Warren Buffet, as a 鈥榩olitical weapon of mass destruction.鈥 We need a long-term solution to address this issue, but defaulting on U.S. debt payments, which could trigger a massive increase in borrowing costs, tarnish our reputation, create market volatility, and threaten the economic health of the country, is not the way to do that. [this bill] will repeal the debt limit so that Congress can begin an honest, bipartisan conversation about how to reduce the deficit and build a responsible budget.鈥

Sen. Michael Bennet (D-CO), who was one of this bill鈥檚 Senate sponsors during the last Congress, wrote

鈥淧roponents of threatening default to extract partisan demands ignore two fundamental realities about the debt limit: First, they insist that the debt limit is a tool for reducing our annual deficits. The only relationship the debt limit has to our deficits is that if we fail to raise the debt limit well in advance of the deadline, those deficits will rise, because the rest of the world will be unwilling to finance our existing debt at such low interest rates for fear of not being paid. Second, some Members of Congress contend that if we don鈥檛 raise the debt limit by the deadline it鈥檚 not a big deal, because we can just go on paying some parts of our budget and not others. They suggest we can prioritize paying interest on the debt above all else with whatever cash is coming in on a daily basis, so we鈥檙e not technically in default. However, market participants and ratings agencies have said that even a very brief period where the U.S. was not paying all of its obligations would place us technically in default鈥 In the unlikely case that everything goes smoothly and people are untroubled by their delayed Social Security payments and investors willingly continue to finance the United States, then where鈥檚 the leverage? Either crossing the debt limit is bad because people will be harmed (thus, the extreme factions have leverage), or it isn鈥檛 a big deal after all (thus, they have no leverage). It cannot be both.鈥

In a 2017 op-ed in The Hill, The Concord Coalition鈥檚 executive director, Robert Bixby, and James Carter, who served as the head of tax policy implentation on President Trump鈥檚 transition team and depty assistant secretary of the Treasury and deputy undersecretary of labor under President George W. Bush, wrote: 

鈥淭he original purpose of creating a statutory debt limit in 1917 was not to prevent the government from running up too much debt, but to remove the requirement that Congress authorize individual issuances of debt. The intent was to help ensure that sufficient and timely credit would be available to finance World War I. One hundred years later, things are very different. The main use of the debt limit now is to prevent the government from paying its bills on time, putting the nation鈥檚 creditworthiness at risk and threatening a global financial crisis鈥 The federal debt limit is the public policy equivalent of an appendix; it serves no practical purpose and, if ruptured, it represents a grave threat to the country鈥檚 economic and fiscal health. Some argue the debt limit provides useful leverage to extract fiscal reforms that would be hard to enact otherwise. However, this is ultimately a 鈥榯rigger鈥 that must never be pulled, so it鈥檚 of limited value. Furthermore, there鈥檚 the risk it might go off accidentally.鈥

Bixby and Carter observed that both economists and Treasury Secretary Steven Mnuchin support abolishing the debt limit

鈥淓conomists generally agree we should abolish the debt limit. Once government spending and tax decisions are made, the only question remaining is whether to honor our obligations. As Treasury Secretary Steven Mnuchin said last March, 鈥榃e've spent the money. So the concept of the debt limit...is somewhat of a ridiculous concept.鈥欌

President Trump questioned the debt limit鈥檚 utility in June 2017, saying that 鈥For many years people have been talking about getting rid of the debt ceiling altogether. There are lots of good reasons to do that.鈥 

Last Congress, Democrats in both the House and Senate introduced legislation to repeal the debt limit. However, some congressional Republicans were unwilling to entertain the idea of eliminating the debt limit.

This bill doesn鈥檛 have any House cosponsors in the 116th Congress. Its Senate companion, introduced by Sen. Brian Schatz (D-HI), has five Democratic Senate cosponsors. As of July 29, 2019, neither bill had received a committee vote.

Last Congress, Sen. Schatz introduced this bill with the support of two Democratic Senate cosponsors and it didn鈥檛 receive a committee vote.  

Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / bauhaus1000)

AKA

End the Threat of Default Act

Official Title

To repeal the debt ceiling, and for other purposes.

    Keep The Debt Limit Constraints In Place To Control Spending While imperfect, the debt limit is at least a means of forcing Congress to confront the issue of runaway federal spending on a semi-regular basis. Without a debt limit, the federal government would spend itself into ruin. SneakyPete.......... 馃憤馃徎馃憤馃徎馃憤馃徎馃憤馃徎. 8.5.19..........
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    Congress salary should be eliminated until they do their job and balance the budget.
    Like (91)
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    You want to give politicians a credit card without a limit? I鈥檓 thinkin that鈥檚 not going to work out real well.
    Like (68)
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    No. Stop acting like kids, and make a damn budget.
    Like (46)
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    The federal debt limit is the public policy equivalent of an appendix; it serves no practical purpose and, if ruptured, it represents a grave threat to the country鈥檚 economic and fiscal health. Some argue the debt limit provides useful leverage to extract fiscal reforms that would be hard to enact otherwise. However, this is ultimately a 鈥榯rigger鈥 that must never be pulled, so it鈥檚 of limited value.
    Like (32)
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    No, what needs to be eliminated are Tax Havens and other wealth stashing loopholes. After all, if we default and the US dollar becomes worthless... the 1% will be hit a lot harder than the majority of the country. My hope is in the bipartisan majority of 1% legislators, who also realize this fact...
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    No open checkbook for irresponsible Congress members. This is the same mentality of a bankrupt individual.
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    What else can you do when the Republicans rack up over $1 trillion of debt where are you going to go from there there鈥檚 no way it鈥檚 going to be paid off. Thanks Donald, thanks Lindsey Graham, Thanks Mitch McConnell. You鈥檝e done a great job of ruining America. Now you鈥檝e turned the president loose to kill us all. My god what has happened to the Republican Party.
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    I have been torn on this issue because I have been looking at debt limits and budgetary allocations limits as being the same. They are not. The debt comes from commitments that our country is already bound to. Not honoring our commitments due to a spending cap is socially, economically and world-politically disruptive. Caps on allocations make a lot more sense and should be part of any legislation passed. Open-ended, multi-year allocations with some budgetary uncertainty should include a contingency budget level consistent with the uncertainty in the allocation cap. A process like this would tend to assure more accurate estimates (since they are capped), would allow strategic cost-benefit assessments of their relative priorities, and bring some discipline in looking at any new legislations true cost and its potential impact on the national debt. There are very real threats coming which may require increasing the national debt. I would like to see these threats dealt with as a strategic long-term conscious decision and not the result of simply piling on lot鈥檚 of nice to have stuff that finally results in an 鈥榦h my, our spending limit is reached鈥 moment.
    Like (17)
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    It doesn鈥檛 surprise me a democrat came up with eliminating the debt ceiling. How else will they pay for all their free giveaways to buy votes? Congress needs to get spending under control. Instead of endless investigations and wasting taxpayers time and money get busy solving our real needs!
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    Having a debt limit doesn鈥檛 do anything other than create a manufactured debt crisis! Congress is just going to keep raising it since they can鈥檛 agree on anything else.
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    No. Cut spending AND raise taxes on the wealthy and the corporations.
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    It makes me ill when I鈥檓 on the same side as SneakyPete who I disagree with 99% of the time. 馃あ It just goes to show every once and a while a blind squirrel finds a nut. SneakyPete found a nut.
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    That is crazy. What if every person in the country did that same thing. GOOD GRIEF
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    Yes. We need full transparency and remove all obstructionist policies. We need a way to fire politicians that do not perform or just vote 鈥淣o鈥 on everything.
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    We need a balanced budget amendment and stop all of this debt increase that future generations of the american people will have to pay for. It can not go on forever
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    To my reps, what is the debt ceiling in your household? I鈥檒l wait.......
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    Congress and the President should run the country the way they expect citizens to do so...live within our means and prioritize spending. They currently are hypocrites, both sides of the aisle. Americans are sick of this.
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    We need to spend the money that is in the budget very wisely, and for the purpose it was intended.
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    It鈥檚 a move by Trump to spend, spend, spend.....don鈥檛 all you Senators get it?
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