Durbin Joins Introduction Of Legislation To Avoid Catastrophic Debt Default
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) this week joined U.S. Senator Brian Schatz (D-HI) to reintroduce legislation to avoid default by repealing the national debt ceiling, an arbitrary limit set by Congress on the amount of funding that the United States Treasury may borrow.
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. In recent years this has become, a politicized procedure that often leads to threats of defaulting on the government’s obligation to pay its bills. A default would be catastrophic and would likely trigger a recession. Military pay, social security and Medicare payments, and Treasury bond yields would all be disrupted.
“Defaulting on the debt would send the economy into a tail spin and be catastrophic for Americans. Playing partisan games with default is dangerous and fiscally irresponsible. We cannot afford to have our economy held hostage for any longer,” said Durbin. “I’m joining my colleagues to introduce legislation that would stop this brinksmanship and end the threat of default for good.”
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.
The legislation is also cosponsored by U.S. Senators Bob Casey (D-PA), Mazie K. Hirono (D-HI), Michael Bennet (D-CO), Ben Ray Luján (D-NM), Chris Van Hollen (D-MD), Martin Heinrich (D-NM), Elizabeth Warren (D-MA), Chris Murphy (D-CT), and Tina Smith (D-MN.).
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