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NEW REPORT: Abolishing the Debt Limit is an Act of Fiscal Responsibility

Mar 3, 2022

Washington, D.C.— Today the House Budget Committee released a report highlighting expert testimony and findings from a recent hearing titled, “Why Congress Needs to Abolish the Debt Limit.”

The report makes the case that, “While the debt limit law does not provide any fiscal policy benefit, its existence does threaten our national well-being.” Witnesses testified that the existence of the debt limit has never constrained spending, and instead, “creates completely unnecessary economic stress.” The Budget Committee hearing was attended by House Majority Leader Steny Hoyer, who echoed the beliefs of Chairman Yarmuth, witnesses, and Budget Committee Members, stating, “eliminating the threat of default would be an act of fiscal responsibility.”

“I cannot think of another provision of budget law that has been as misused, misunderstood, and misrepresented as much as the debt limit,” said Chairman Yarmuth. “The debt limit in its current form has no real benefits, yet it carries the threat of unbearable human and economic costs. The time to abolish is now, before another crisis occurs and before reckless gamesmanship creates another chance for a self-inflicted economic collapse.”

On February 15, 2022, House Budget Committee Chair Rep. John Yarmuth (D-KY), House Budget Committee Vice-Chair Rep. Brendan F. Boyle (D-PA), and U.S. Senate Majority Whip Dick Durbin (D-IL) introduced the Debt Ceiling Reform Act, legislation that would repeal the debt ceiling and give the Secretary of the Treasury the authority to issue new debt as long as the president notifies Congress that new debt is needed.

A PDF of the House Budget Committee’s new report is available here.

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