Luján Joins Colleagues to Introduce Legislation to Avoid Debt Default

Washington, D.C. – Today, U.S. Senator Ben Ray Luján (D-N.M.) joined U.S. Senator Brian Schatz (D-Hawai‘i) to reintroduce 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.

“With Republicans steering us toward a debt default, it’s more critical than ever to eliminate the debt ceiling to ensure that the United States meets our financial responsibilities. Congressional Republicans cannot keep playing this dangerous political game that threatens the economic security of hardworking families and undermining the global economy,” said Senator Luján. “I’m glad to join my colleagues in introducing this urgently needed legislation.”

“Defaulting on our debt would be an economic catastrophe for everyone – families, veterans, seniors. Congress has the chance to debate federal spending, and it’s well before the bill comes due,” said Senator Schatz. “Republicans are using the debt limit to hold the country hostage. We need to stop playing this very dangerous game with the nation’s economy and get rid of the debt ceiling.”

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.

This legislation is cosponsored by U.S. Senators Bob Casey (D-Pa.), Mazie K. Hirono (D-Hawai‘i), Michael Bennet (D-Colo.), Chris Van Hollen (D-Md.), Dick Durbin (D-Ill.), Martin Heinrich (D-N.M.), Elizabeth Warren (D-Mass.), Chris Murphy (D-Conn.), and Tina Smith (D-Minn.).

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