Bills
| 3.23.22

Should the Treasury Have a Plan for Reducing the National Debt Before Raising the Debt Limit? (H.R. 523)

Do you support or oppose this bill?

What is H.R. 523?

(Updated September 23, 2020)

This bill would require the Secretary of the Treasury to provide a report to the House Ways and Means Committee and the Senate Finance Committee before any date on which the Secretary believes the U.S. will reach the statutory debt limit.

Within the report, the Secretary must address the following:

  • The historic, current, and project levels of the debt;

  • The drivers and composition of future debt;

  • How the U.S. will meet debt obligations if the debt limit is raised.

The Secretary would also be required to provide both of the committees with a detailed explanation of:

  • Proposals of the President to reduce the debt in the short-, medium-, and long-term in addition to a progress report on implementing them;

  • The impact an increased debt limit will have on future government spending, debt service, and the position of the U.S. dollar as the international reserve currency;

  • Projections of the fiscal health and sustainability of major entitlement programs including Social Security, Medicare, and Medicaid.

All information provided by the Secretary during their appearances before congressional committees and any written materials must be made publicly available on the Dept. of the Treasury’s website.

Argument in favor

By requiring the Treasury to report to Congress about the national debt and ways to reduce it before the debt limit is reached, lawmakers can take steps to prevent the national debt from continuing to accumulate.

Argument opposed

There’s already plenty of communication between the Dept. of the Treasury and Congress about the debt limit without this report being made a requirement, and lawmakers don’t need to be told how to reduce the debt.

Impact

The House Ways and Means Committee; the Senate Finance Committee; the Dept. of the Treasury; and the Secretary of the Treasury.

Cost of H.R. 523

During the 114th Congress, the CBO estimated that implementing this bill would cost less than $500,000 over the 2016-2020 period.

Additional Info

In-Depth: Sponsoring Rep. Kenny Marchant (R-TX) introduced an identical version of this bill during the 114th Congress to improve transparency during the process of raising the debt limit while also requiring regular updates on debt reduction efforts and strategies:

“Currently, the administration is able to request a debt limit increase without providing a clear-eyed account of the debt, its key drivers, and its risks or consequences to the economy. The Debt Management and Fiscal Responsibility Act calls for any such request to be accompanied by detailed reports on the state of the debt and its composition, proposals to reduce the debt in the short-, medium-, and long-term, and regular updates on debt reduction progress. The bill also requires the Treasury Department to make these documents publicly available in a central online repository. This would allow all Americans to thoroughly examine the nation’s debt for themselves and evaluate whether the administration is following through on efforts to get the nation’s fiscal house in order.”

The current version of this bill has the support of six House cosponsors, all of whom are Republicans. This legislation was passed by the House during the 114th Congress on a 267-151 vote in February 2016.


Of Note: The U.S. national debt surpassed $19 trillion for the first time in February 2016, amounting to about $58,000 per American citizen and $158,000 per taxpayer at the time of writing. In 2015 the federal government spent over $223 billion making interest payments on the national debt, and the White House expects that expense to rise to $787 billion in 2026 under the President’s budget proposal for 2017.

The debt ceiling first came into use by the federal government in 1917 to help finance spending during World War I, and has been raised more than 100 times since its creation.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user puroticorico)