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senate Bill S. 716

Should Debt Ceiling Hikes be Tied to Dollar-for-Dollar Spending Cuts?

Argument in favor

The debt is out of control, and the best way to keep the federal government from continuing to add to it year after year is by tying all debt limit increases to offsetting spending cuts.

Travis's Opinion
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06/10/2017
As long as the spending cuts come from the defense budget.
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Marilyn's Opinion
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06/10/2017
Quit spending, what don't you get?tighten our belts. Quit spending on other countries.
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55McCoy's Opinion
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06/10/2017
Get the debt under control, stop wasteful spending, make the government more effective.
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Argument opposed

Congress shouldn’t tie all future increases of the debt limit to mandatory spending cuts that could impact important services the federal government offers.

IllWill's Opinion
···
06/10/2017
It's not common sense to reduce spending and jeopardize vital government services for the sake of trying to reduce our debt over time. The government is not a household or a business so don't run it like one. The government can create money out of thin through the Federal Reserve and it can raise taxes whenever it wants in order to control its debt and deficit. It's amazing that our politicians don't even recognize how our government functions.
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A's Opinion
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06/10/2017
A government is not a business. Do not run it like a for-profit business.
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Frank's Opinion
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06/10/2017
No for several reasons with one overarching theme: a federal government debt is not a per se bad thing and is typically a good thing. I will explain. First, the US continuously repays its debts; it only borrows new money after the fact. Plus, debt repayment is still less than 6.6% of the federal budget and less than 1.4% of GDP. If I spent only 6.6% of my income on a mortgage, I would save several months of mortgage payments each year. If I only spent 1.4% of my income on a mortgage, I'd be able to afford a multimillion dollar mansion. Therefore, the debt isn't nearly as big an issue as typically claimed. However, suppose it was. Then what? In that case, the federal government cannot get in over its head because the congress defines what counts as a "dollar" and repaying debts is easy when One gets to decide what and how much is used for repayment. Suppose, however, those debts must be paid in dollars as We know them today. The deficit and accumulated debt would still not be an issue because much of the debt is owed to various federal agencies. In other words, the federal government has borrowed the money from itself. What if those debts were repaid? Would there be an issue with the remaining debt? No. As Alexander Hamilton noted in the earliest days of the republic, a government debt, if not excessive, gives creditors a vested interest in the economic health and well-being of the nation. Which means other countries buying US debt is an inherently good thing for Us because those countries then want to protect Us and help Us grow and thrive. Without that foreign debt, countries would have less incentive to be helpful and peaceful with Us and likely lead to increased wars and lower incomes all around. But what about that word "excessive"? What happens when it gets excessive? Fortunately, We have never gotten to that point and probably never can because, as a debt starts to become excessive, interest rates would jump up and act as a metaphorical "brake" on borrowing, preventing that excess. So, since the deficit and debt are not real issues and at best the policy equivalent of invisible intangible Dragons breathing room temperature fire, the idea of "raise the debt limit only if We balance the budget" is a solution in search of a problem and would actually cause problems instead.
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What is Senate Bill S. 716?

This bill — known as the Dollar-for-Dollar Deficit Reduction Act — would require the Dept. of the Treasury to issue a debt limit warning to Congress if it will be reached within 60 days that includes a determination of when extraordinary measures may be necessary to fund the government. Any presidential request to increase the debt limit would be required to include the amount of the proposed increased and suggested legislation to reduce spending by at least that sum over 10 years. A point of order could be raised in the House and Senate against legislation that raises the debt limit without reducing spending over 10 years by the amount of the increase.

Impact

U.S. citizens and taxpayers; Congress; and the president.

Cost of Senate Bill S. 716

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Sen. Rob Portman (R-OH) introduced this bill to ensure that Congress reduces spending on a dollar-for-dollar basis when it raises the debt limit:

“If we’re going to raise the debt limit, we should also rein in spending and address our massive debt. That’s just common sense, Our current spending and debt levels are unsustainable.  They threaten to drive up tax rates, reduce economic growth, and leave an increasingly heavy burden on future generations of Americans. This legislation would address this problem by requiring Congress to responsibly offset increases in the debt limit with spending reductions over a 10-year period.”

This legislation has the support of five Republican cosponsors in the Senate.

 

Of Note: The U.S. national debt is approaching $20 trillion, larger than the $19 trillion American economy, and Congress is going to need to increase the debt limit again before Fall 2017.

 

Media:

Summary by Eric Revell

(Photo Credit: Public Domain)

AKA

Dollar-for-Dollar Deficit Reduction Act

Official Title

A bill to require that any debt limit increase be balanced by equal spending cuts over the next decade.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on the Budget
    IntroducedMarch 23rd, 2017
    As long as the spending cuts come from the defense budget.
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    It's not common sense to reduce spending and jeopardize vital government services for the sake of trying to reduce our debt over time. The government is not a household or a business so don't run it like one. The government can create money out of thin through the Federal Reserve and it can raise taxes whenever it wants in order to control its debt and deficit. It's amazing that our politicians don't even recognize how our government functions.
    Like (96)
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    A government is not a business. Do not run it like a for-profit business.
    Like (86)
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    No for several reasons with one overarching theme: a federal government debt is not a per se bad thing and is typically a good thing. I will explain. First, the US continuously repays its debts; it only borrows new money after the fact. Plus, debt repayment is still less than 6.6% of the federal budget and less than 1.4% of GDP. If I spent only 6.6% of my income on a mortgage, I would save several months of mortgage payments each year. If I only spent 1.4% of my income on a mortgage, I'd be able to afford a multimillion dollar mansion. Therefore, the debt isn't nearly as big an issue as typically claimed. However, suppose it was. Then what? In that case, the federal government cannot get in over its head because the congress defines what counts as a "dollar" and repaying debts is easy when One gets to decide what and how much is used for repayment. Suppose, however, those debts must be paid in dollars as We know them today. The deficit and accumulated debt would still not be an issue because much of the debt is owed to various federal agencies. In other words, the federal government has borrowed the money from itself. What if those debts were repaid? Would there be an issue with the remaining debt? No. As Alexander Hamilton noted in the earliest days of the republic, a government debt, if not excessive, gives creditors a vested interest in the economic health and well-being of the nation. Which means other countries buying US debt is an inherently good thing for Us because those countries then want to protect Us and help Us grow and thrive. Without that foreign debt, countries would have less incentive to be helpful and peaceful with Us and likely lead to increased wars and lower incomes all around. But what about that word "excessive"? What happens when it gets excessive? Fortunately, We have never gotten to that point and probably never can because, as a debt starts to become excessive, interest rates would jump up and act as a metaphorical "brake" on borrowing, preventing that excess. So, since the deficit and debt are not real issues and at best the policy equivalent of invisible intangible Dragons breathing room temperature fire, the idea of "raise the debt limit only if We balance the budget" is a solution in search of a problem and would actually cause problems instead.
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    I say nay. The only way I'd support such an option is if there were assurances the cuts would come from corporate welfare, tax breaks currently provided to the super rich and unnecessary defense spending. Since none of that is likely to occur in the current political environment my answer is a resonating no, as in there is no way I will ever support giving this GOP led Congress and White House yet another tool to use in their biased war on the poor and the working class. Given all the essential services already on the chopping block the people of this nation certainly cannot afford to lose any more core services and that is precisely what will happen if this bill passes. What needs to occur is an end to corporate welfare and tax breaks for the mega-rich. That's what has gotten us into this mess in the first place (along with lengthy unnecessary wars). Then, take that money and put it to use for the good of the people with things like universal healthcare, improved public education and affordable college or other career training. This is what the citizens of this nation want and need. Vote no on this bill and get to work acting in the true best interest of your constituents.
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    TAX RICH PEOPLE
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    Quit spending, what don't you get?tighten our belts. Quit spending on other countries.
    Like (23)
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    Get the debt under control, stop wasteful spending, make the government more effective.
    Like (17)
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    This is more worn-out, supply-side, "all taxes and government in general is bad" baloney from the ultra-right. These guys today make Reagan look like LBJ. Debt is not a prima facie bad thing, either. The spending cuts also always seem to come from social programs that the most vulnerable in our society depend on. We can get more revenue if we have a tax policy that does not subsidize corporations. Quit with the political nonsense.
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    Dollar for dollar tax increase on the 1%, corporations, cuts in the military, cuts in tax breaks for off shoring and tax increase in off shore accounts, sound a lot better! Also cut the red state off they get most of the federal money, then blue states. Blue state put in more then they get back! Or how about a dollar for every lie Trump, family and friends make, we could run a surplus.
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    I'm all for reducing the deficit and the debt, but these kinds of dollar-for-dollar offsets are far too draconian. The time to make reduction efforts is during the budgeting process.
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    Maybe we should start with an actual budget. Not stop gap measures.
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    It doesn't help to reduce spending if your not going to increase revenue. Stop giving tax breaks to the wealthy & that will drastically reduce the deficit.
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    Too arbitrary.
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    Economists like Paul Krugman have proved that this does not work to improve an economy. It also increases unemployment.
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    No services should be cut. Congress should stop corporate welfare, PERIOD.
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    Ask George Bush about spending and deficits. Dont spend on crap we don't need like manufactured wars and walls and nukes.
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    Ever read What's The Matter With Kansas? Cutting taxes and cutting spending haven't worked out so well in Kansas. Or Oklahoma for that matter. The conversation on national debt has been driven by Ayn Rand economic theory - supply side economics taken to an extreme. The reality is the only group who benefits from cutting taxes and spending is the 1%. Servicing the national debt is not a challenge if government does what government should do for "the people" not for the Koch Cartel. Paul Ryan - do your job.
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    Of course not. That's just silly. Increase taxes on the wealthy. Leave the middle class alone. Leave health care alone except to improve it. Leave programs in place that are helping people that don't have what you have.
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    Only if the budget cuts are to congressional pensions, health care, and salary, or to the outrageous defense budget! Since that will NEVER happen with our socially conservative yet fiscally insane representatives - cut health care for women and the poor but increase funding for missiles to make holes in an air base halfway across the world for NO REASON - this must be voted down. THE US GOVERNMENT IS NOT A BUSINESS AND ABSOLUTELY CAN NOT BE RUN AS IF IT WERE.
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