This obviously won’t pass the Teapublican House, but I like the way Reps. Moran, Nadler and Johnson are thinking here. The fact is, the debt ceiling for years was an utterly noncontroversial, purely technical and routine matter that has been irresponsibly politicized by the radical right. This has endangered not just the U.S. credit rating, but also its good name and future economic prosperity, for no good reason other than the Teahadists’ desire to use it as a “hostage” in order to extract concessions. The problem is, the “hostage” is actually the United States of America, and the Teahadists are willing to shoot it. Which is why we need legislation like the following:
Reps. Moran, Nadler, and Johnson Introduce Legislation to Abolish Federal Debt Ceiling
FOR IMMEDIATE RELEASE: Wednesday, September 14, 2011
Ilan Kayatsky (Nadler), 917-757-3104
Andy Phelan (Johnson), 404-593-9126
Anne Hughes (Moran), 202-225-4376
WASHINGTON, D.C. – Today, Representatives Jerrold Nadler (D-NY), Hank Johnson (D-GA) and Jim Moran (D-VA) introduced the Full Faith and Credit Act of 2011 to eliminate the federal debt ceiling, an unnecessary law increasingly used as an impediment to Congress’s ability to further economic recovery. The Members highlighted the recent disastrous debt ceiling debate and the promise of Republican congressional leaders to invoke the law at each turn in order to impose their extreme and economically regressive agenda on the American people. The legislation comes on the same day that House Republicans moved to pass a resolution expressing disapproval of the U.S. borrowing to fund government operations already directed by Congress.
The Full Faith and Credit Act would allow the U.S. Treasury to ensure that our nation’s bills are paid on time and without political brinkmanship.
“Republicans in Congress have shown they are willing to hold the fate of our economy hostage by using the debt ceiling as a political weapon,” said Moran. “It’s a tactic that has far ranging effects, disrupting financial markets, damaging the peoples’ trust in government and delaying consideration of must-pass legislation to create jobs and get our economy back on track. Given the ramifications of congressional Republicans’ irresponsible behavior, the debt ceiling should be eliminated. Created in the early 20th century, it no longer serves a useful purpose yet has the potential to do great harm.”
“The debt ceiling is truly arbitrary and has nothing to do with the deficit,” said Nadler. “The debt ceiling does not prevent the United States from incurring new debts, but has become a cudgel with which Republicans are holding our economy hostage and punishing the millions of Americans who are struggling. Let us abolish the debt ceiling and get to work, finally, on the critical needs of the American people: creating jobs and economic development, providing aid to states, building infrastructure, and instilling aggregate demand back into the economy.”
“Republicans in Congress undermined the economy and faith in the country by threatening to force default,” said Johnson. “The Full Faith & Credit Act will prevent politicians from holding the nation’s credit hostage ever again.”
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 August debt ceiling showdown 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.
The Full Faith and Credit Act of 2011 would remove the unnecessary debt ceiling, ensuring that the U.S. Treasury can take out loans only for government operations authorized by Congress.