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Top Dem seeks to abolish debt ceiling

Top Dem seeks to abolish debt ceiling

 

Sen. Brian Schatz (D-Hawaii) wants to abolish the debt ceiling, and is planning to file a bill to do just that when Congress reconvenes next month.

Schatz, the Democrats’ chief deputy whip, announced on Twitter that he has already drafted legislation to abolish the statute, which has become a regular flashpoint between Democrats and Republicans.

 

 

The debt ceiling sets a legal limit to how much the US Treasury can borrow, even if Congress has approved spending in excess of that limit. If spending reaches the limit, the Treasury can’t borrow more money to pay the bills, leading to a debt default. It would also harm the U.S. credit rating.

The U.S. has come to the brink of default several times in the past decade, most notably in 2011 when the ratings agency S&P downgraded the credit rating as a result of brinksmanship over the debt limit.

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Fiscal hawks have tried to use the must-pass debt limit vote to enact spending or regulatory reforms, or pass otherwise difficult-to-swallow legislation. In 2013, for example, conservative Republicans championed adding an Obamacare repeal to the debt limit lift.