Debt Ceiling Reform Act
The Debt Ceiling Reform Act creates a formal process to suspend the debt limit (the statutory cap on how much the federal government can borrow) when the Treasury determines more borrowing is needed to meet obligations. Under the bill, the Treasury must certify, 60 to 46 days before the end of any suspension, the end date for the period of suspension (up to two years from the originally applicable end date). Congress then has a 45-calendar-day window to pass a joint resolution disapproving the Treasury’s action; if Congress does not pass such a disapproval, the suspension takes effect and the debt limit is temporarily lifted for the specified period. The Act also sets tight, expedited rules for quick consideration of the joint resolution in both chambers, and requires Treasury to avoid actions like building cash reserves specifically to extend the suspension. Finally, it adds a requirement to include debt held by the public as a percentage of GDP and net debt (excluding financial assets) in a standard debt information table. In short, the bill aims to prevent default by creating a fast, Treasury-triggered mechanism to suspend the debt limit when borrowing needs arise, while preserving a limited congressional check via a speedy disapproval process and enhanced debt transparency.
Key Points
- 1New suspension framework: Establishes a dedicated provision (section 3101B) that allows the debt limit to be suspended after a Treasury certification, with a defined end date and a 45-day congressional disapproval window.
- 2Treasury certification and end date: The Secretary of the Treasury must certify a proposed end date for the suspension not earlier than 60 days and not later than 46 days before the end of the current suspension, with the end date set no more than two years out from the otherwise applicable end.
- 3Congressional disapproval and default protection: If Congress does not enact a disapproval joint resolution within 45 days of receipt of the certification, the suspension proceeds. If disapproval is enacted, the suspension ends as provided by law.
- 4Expedited legislative process: The bill creates fast-track procedures for both the House and Senate to consider the joint resolution, including limited debate times, no amendments, and special rules to prevent procedural delays.
- 5Restrictions and safeguards during extension: Limits on creating cash reserves and requires that any extended borrowing be strictly necessary to fund obligations incurred by law; no new, nonessential borrowing is intended to be part of extensions.
- 6Transparency enhancement: Adds a requirement to include debt held by the public as a percentage of GDP and debt held by the public net of financial assets in the debt information presented by the government.