Portman Introduces Dollar-for-Dollar Deficit Reduction Act

Press Release

Today, U.S. Senator Rob Portman (R-OH) introduced the Dollar-for-Dollar Deficit Reduction Act, legislation that will ensure that Congress reduces spending on a dollar-for-dollar basis when it increases debt above the federal debt limit set by law. The reductions in government spending required under the bill will take place over a 10-year period. And since all spending reductions will be offset from within federal programs, additional interest savings will accrue after the 10-year period.

"I have long believed that if we're going to bypass the statutory debt limit -- either by raising the limit or suspending it -- we should also rein in spending and address our massive and growing federal debt. That's just common sense," Portman said. "The rapid growth of entitlement spending and total debt projected under current law remains unsustainable. It threatens to drive up tax rates, reduce economic growth, and leave an increasingly heavy burden on future generations of Americans if Congress does not begin to responsibly reduce deficits. The Dollar-for-Dollar Deficit Reduction Act establishes a framework to achieve this goal by requiring Congress to responsibly offset increases in debt subject to the limit with spending reductions over a 10-year period."

NOTE: Portman introduced the bill with Senators John Barrasso (R-WY), Johnny Isakson (R-GA), and Shelley Moore Capito (R-WV). The debt limit has provided Congress with an opportunity to make key policy changes that rein in the expanding national debt. For example, the 1985 Gramm-Rudman-Hollings Act, which helped reduce the deficit, was attached to a debt limit bill. The three largest deficit reductions bills in the 1990s -- in 1990, 1993, and 1997 -- were each linked to debt limit legislation, as was the Statutory Pay-As-You-Go Act of 2010. Finally, the debt limit was the impetus for the 2011 Budget Control Act, estimated to save $1.9 trillion over the decade. In short, nearly every significant deficit reduction law of the past 30 years has been linked to a debt limit debate.

The Dollar-for-Dollar Deficit Reduction Act will make the "dollar-for-dollar" rule a permanent debt-limit policy to ensure that any increase in the debt limit corresponds with spending cuts. In addition, the bill will:

Require the Treasury Secretary to notify Congress 60 calendar days before the debt limit is to be reached and extraordinary measures undertaken.
Require that any presidential request to raise limit be accompanied by a proposal to cut non-interest spending by an equal or greater amount over the next decade.
Require that any legislation to increase the debt limit include non-interest spending cuts of an equal or greater amount over the next decade, subject to a point of order.
Require that any legislation to suspend the debt limit include non-interest spending cuts over 10 years of at least the amount that the Congressional Budget Office estimates the debt would increase by during the period of suspension, subject to a point of order.
Prohibit the use of timing shifts and expiring emergency spending to reach the spending savings target.
Require spending cuts of more than $3.5 trillion over the next decade, if Congress were to increase or suspend the limit annually.
Cut the projected deficit by over two-thirds by 2029.
Under current law, debt held by the public is projected to increase from 78 percent of GDP today (already nearly double the average the past 50 years) to 144 percent of GDP by 2049.