Hirono Introduces Legislation to Avoid Catastrophic Debt Default

WASHINGTON, D.C. – U.S. Senator Mazie K. Hirono (D-HI) joined ten of her Senate Democratic colleagues in introducing legislation to avoid default by repealing the national debt ceiling, an arbitrary limit set by Congress on the amount of funding that the United States Treasury may borrow. The bill was led by Senator Brian Schatz (D-HI).

“The U.S. government has an obligation to pay its bills. Using the debt ceiling as political leverage is reckless and irresponsible,” said Senator Hirono. “For too long, the debt ceiling has been weaponized in attempts to advance ideological agendas, endangering the health of our economy and the full faith and credit of the United States. That’s why I’m glad to join my colleagues in introducing legislation to eliminate the debt limit so we can avoid default.”

In practice, the debt limit has no impact on government spending, which is authorized and approved through the federal budget and appropriations process. Instead, the ceiling restricts the U.S. Treasury from paying for expenditures already made by Congress. This disconnected process consistently requires Congress to raise the ceiling before it is reached. In recent years, this has become a politicized procedure that often leads to threats of defaulting on the government’s obligation to pay its bills. A default would be catastrophic and would likely trigger a recession. Military pay, Social Security and Medicare payments, and Treasury bond yields would all be disrupted. 

The United States is one of only two democratic countries with a statutory debt ceiling, and the only one that could single-handedly cause a global recession. Since 1960, Congress has acted more than 75 separate times to raise, temporarily extend, or revise the definition of the debt limit. In 2011, the crisis surrounding raising the debt ceiling led credit rating agency Standard & Poor’s to downgrade the U.S. government’s credit rating for the first time ever.

In addition to Senators Hirono and Schatz, the legislation is cosponsored by U.S. Senators Bob Casey (D-PA), Michael Bennet (D-CO), Ben Ray Luján (D-NM), Chris Van Hollen (D-MD), Dick Durbin (D-IL), Martin Heinrich (D-NM), Elizabeth Warren (D-MA), Chris Murphy (D-CT), and Tina Smith (D-MN).

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