Sens. Chris Coons, D-Delaware, Brian Schatz, D-Hawaii, and Michael Bennet, D-Colorado, introduced legislation to repeal the national debt ceiling, an arbitrary limit set by Congress on the amount of funding that the U.S.Treasury may borrow.
“The time has come for Congress to eliminate the debt ceiling. Debt limit showdowns have become far too routine, and it's now considered almost normal to threaten default. That must change,” Coons said. “We need to address our national debt in a sensible, bipartisan way, but continuing to use the threat of catastrophic default as the primary tool for deficit reduction is not leadership, it’s playing politics with the reputation of the U.S. government and household wealth of Americans.”
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 U.S. is one of two democratic countries with a statutory debt ceiling. 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.