July 10, 2017

House Moves To Prevent Debt-Ceiling Showdowns

Bill would issue bonds; allow President to cut spending, sell assets

by Chris Thomas

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We know very little about H.R. 3167 at the time of this writing. This bill was referred to committee on July 6th, 2017 and the formal text of the legislation has not been sent to the Library of Congress yet. Nonetheless, much can be inferred from the bill’s (lengthy) title:

To provide that, in the event that the Secretary of the Treasury estimates that the debt ceiling will be reached, the Secretary is required to issue GDP-linked bonds to pay the principal and interest on the public debt and the President is authorized to request the rescission of certain unobligated balances and sell certain mortgage-related assets, and for other purposes.

Why this matters

The debt ceiling has been a political football for some years and has been used, primarily by Republicans, as a means of gaining political leverage over a Democratic President. H.R. 3167 is more than just a reversal from the debt-ceiling brinksmanship of the Obama era, however. It seems to be heading off a debt-ceiling showdown before Democrats can take up the weapon wielded against them since 2011.

Directing the Secretary of the Treasury to automatically begin issuing bonds essentially guarantees that the United States will not default on its debt should Congress find itself unable to reach agreement. This provision alone would dramatically erode the power of both Congress and the minority power in the Congress.

More concerning is the (still vague) powers granted to the President including the sale of certain assets and the cutting of “unobligated” balances, essentially allowing the President to ignore Congressional budget prioritization should a default seem likely.

According to The Hill, the U.S. government could run up against the debt ceiling towards the end of August.

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