Denver — Colorado U.S. Senator Michael Bennet joined U.S. Senator Brian Schatz (D-Hawaii) to reintroduce the End the Threat of Default Act. This legislation would 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.
“Year after year, the fight over the debt ceiling is weaponized as a manufactured political crisis that has nothing to do with fiscal responsibility and seriously threatens small businesses, workers, and our economy. We cannot allow House Republicans to hold the entire American economy hostage to score a few political points. It’s more urgent than ever that we eliminate the debt ceiling to permanently lift the threat of default from our economy and focus on our work for the American people,” said Bennet.
“Defaulting on our debt would be an economic catastrophe for everyone – families, veterans, seniors. Congress has the chance to debate federal spending, and it’s well before the bill comes due,” said Schatz. “Republicans are using the debt limit to hold the country hostage. We need to stop playing this very dangerous game with the nation’s economy and get rid of the debt ceiling.”
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 approved 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.
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.
Bennet was an original cosponsor of this legislation, which was first introduced in 2017. In addition to Bennet and Schatz, this legislation is cosponsored by U.S. Senators Bob Casey (D-Pa.), Mazie K. Hirono (D-Hawaii), Ben Ray Luján (D-N.M.), Chris Van Hollen (D-Md.), Dick Durbin (D-Ill.), Martin Heinrich (D-N.M.), Elizabeth Warren (D-Mass.), Chris Murphy (D-Conn.), and Tina Smith (D-Minn.).
The text of the bill is available HERE.