Today, Representatives Jerrold Nadler (D-NY), Hank Johnson (D-GA), Jim Moran (D-VA), Jan Schakowsky (D-IL), Keith Ellison (D-MN), and Peter Welch (D-VT) introduced new legislation, entitled The Full Faith and Credit Act of 2013, to eliminate the federal debt ceiling, a law they view as unnecessary and increasingly an impediment to Congress's ability to further economic recovery. Only a year-and-a-half after the last disastrous debt ceiling debate, House Republican leaders plan to use the same political brinksmanship again this year in order to impose their extreme and economically regressive agenda on the American people. A repeal of the debt ceiling would allow Congress to move forward with legislation that actually promotes jobs, economic recovery and growth.
"We cannot allow our economy to be threatened every year by political extremists intent on exploiting the debt ceiling to force through massive cuts and so-called entitlement reform," said Nadler. "The debt ceiling is arbitrary, doesn't affect the deficit, and serves no real function in keeping spending down -- and it's time to abolish it. Only then will we be certain to pay our bills on time and take away from extremists this tool for political blackmail."
"The process of raising the debt ceiling should not be used as political weapon against the American people and our credit rating," said Johnson. "By tying the debate on spending and taxation to the debt ceiling, Republicans needlessly inflict pain to extract cuts to the social safety net. Repealing the debt ceiling would ensure that Tea Party Republicans can no longer hold the full faith and credit of the United States hostage to further their extreme agenda."
"The debt ceiling has been politically weaponized, last year leading to the downgrading of our nation's credit rating for the first time in history," said Moran. "The Full Faith and Credit Act of 2013 would end this foolish gamesmanship, requiring the U.S. to honor its debts by eliminating politicians' ability to engage in economically dangerous PR stunts."
"This manufactured debate on raising the debt ceiling is the direct result of Republicans choosing to hold the full faith and credit of the United States hostage in order to protect the wealthiest Americans and enact cuts to Social Security, Medicare, and Medicaid," said Schakowsky. "We cannot allow Republicans to do what they did last year -- to threaten our entire economy to avoid paying for expenditures already enacted into law. It's time to repeal the debt ceiling -- an unnecessary encumbrance that virtually no other country in the world has -- and give American families, businesses, and seniors confidence that we will meet our obligations, and that the economic integrity of our country will remain strong."
"America is not a deadbeat nation," said Ellison. "We should not allow one party to hold the full faith and credit of the United States of America hostage to partisan demands. It's time we end a loophole which threatens to plummet millions of working Americans into uncertainty and risks the economic stability of the world's largest economy."
"The debt ceiling doesn't control spending, Congress does," said Welch. "What the debt ceiling does do is give irresponsible politicians an irresistible platform from which to grandstand. It's time to get rid of this arcane law and put to rest the question of whether American will continue to pay its bills."
"Businesses want to see government working to address critical needs like investing in our economy and helping to create jobs," said Richard Eidlin, Policy Director at the American Sustainable Business Council. "It makes sense for Congress to eliminate the artificial debt ceiling which distracts from the vital work that must be done to strengthen the economy. It's irresponsible for members of Congress to risk putting the nation in default, which will cause interest rates to go up for businesses, many of whom are already having a challenging time accessing capital."
The modern debt ceiling, set in 1939 based on amendments to the Second Liberty Bond Act of 1917, consolidated federal debts in order to provide the U.S. Treasury more flexibility to reduce interest costs and minimize financial risks. In the 1980s and early 1990s, the House of Representatives, at times, used a mechanism, referred to as the Gephardt Rule, to automatically increase the debt ceiling to keep pace with annual congressional spending. In the last 10 years, Congress has voted to increase the debt ceiling 10 times. The 2011 debt ceiling face-off reflected a shift from 30 years of clean debt ceiling increases and resulted in Standard & Poor's downgrading of the U.S. economy for the first time in history.