Current News

/

ArcaMax

Bipartisan duo offers way out of debt limit stalemate

Paul M. Krawzak, CQ-Roll Call on

Published in News & Features

WASHINGTON — Two House lawmakers unveiled legislation Friday they hope can help Congress begin to tackle the rising national debt and get out of a major fiscal jam at the same time.

Scott Peters, D-Calif., and Jodey C. Arrington, R-Texas, are resurrecting a proposal they first wrote last year that would allow for expedited suspension of the statutory debt limit if accompanied by a plan to shrink what the government owes to creditors.

They said the measure would avoid recurring fights over the debt limit, a tough vote for most lawmakers. But it would not prevent Congress from suspending or raising the debt limit in the same way it has in the past.

The plan comes at a time when House and Senate Democratic leaders are preparing to grapple with raising the debt limit before the end of the year — though it is unclear what form this will take. Something needs to give soon, however, as the Treasury Department warns it may not have enough cash or borrowing room to pay all the nation’s bills on time beyond Dec. 15.

The Bipartisan Policy Center, which has been offering periodic estimates of when the Treasury will run out of money, endorsed the Peters-Arrington measure.

If the legislation could gain support from Republicans and Democrats in both chambers, it could potentially be attached to a debt limit suspension or increase to make one of the most typically distasteful votes more palatable.

 

In its latest estimate, BPC narrowed its projection for when the debt limit would need to be raised or risk a fiscal crisis. The think tank says what it calls the “x date” will most likely occur between Dec. 21 and Jan. 28. That’s a little later than Treasury’s projection, though administration officials say there’s a decent chance they could at least make it through Dec. 15 unscathed. But pretty soon after that conditions could deteriorate.

Congress raised the debt ceiling by $480 billion in October, bringing the total limit to $28.9 trillion. That measure was designed to last until at least Dec. 3, after which another increase or suspension would be required to avoid the risk of defaulting on financial obligations.

Then the new infrastructure law required a $118 billion cash infusion into the Highway Trust Fund, which Treasury said would be completed by Dec. 15; that will significantly reduce U.S. fiscal headroom.

Shai Akabas, BPC director of economic policy, said in a statement Congress will be “flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit.”

...continued

swipe to next page
©2021 CQ-Roll Call, Inc., All Rights Reserved. Visit cqrollcall.com. Distributed by Tribune Content Agency, LLC.