Rep. Peters Helps Pass Plan to Protect Economic Growth and America’s Credit
WASHINGTON, D.C. – Today, Congressman Scott Peters (CA-52) released the following statement after voting for a plan to protect the nation’s economic growth as well as America’s credit rating:
“Today Congress acted to pay America’s bills that are due and to avoid default and potentially devastating effects to our national economy,” Rep. Peters said. “Now it’s time for Congress to have a serious conversation about reducing our long-term debt.”
“As I’ve said before, we need real reforms that separate political posturing from the debt ceiling – that’s why I’ve introduced legislation to fix it. It’s time for Congress to get back to work setting the table for American job growth, instead of threatening our country’s credit rating.”
Congressman Peters has been a vocal advocate against the crisis-to-crisis mentality that has been the norm in Washington, D.C., for far too long. Last Fall, he introduced a two-part legislative package to end the debt ceiling drama, protect the U.S. economic recovery, and sustainably lower the national debt. That effort has been endorsed by Erskine Bowles and former Sen. Alan Simpson, who formerly co-chaired the National Commission on Fiscal Responsibility and currently co-chair the Moment of Truth Project, an effort to build on the ideas of the Fiscal Commission and spark a national discussion on comprehensive budget reform.
Background on the legislative package:
- The debt package is a two part process and would address both the economic danger of debt growing faster than the economy, and the uncertainty caused by the debt limit, by indexing the debt limit to GDP and requiring action by the President and Congress if the debt is growing faster than the economy.
- By indexing the debt limit to GDP, Congress would not need to approve legislation increasing the debt limit as long as the debt remains on a stable or declining path as a share of GDP.
- If debt held by the public is projected to grow as a percentage of GDP, Congress and the President would be required to consider policies to prevent the debt from increasing faster than GDP before a debt limit increase is necessary
- By eliminating the need to increase the debt limit if the debt is stable or declining as a percentage of GDP, and putting a process in place requiring the President and Congress to act to prevent the debt from growing faster than the economy, this legislation prevents the brinksmanship and last-minute deals to avoid default.
- At the same time it would make the need to increase the debt limit a more meaningful indication of fiscal stewardship, because legislation increasing the debt limit would only be necessary if policymakers have failed to keep the debt on a stable or declining path.
- If the Office of Management and Budget projects the debt will grow faster than the economy, the President and Congress would have submit legislative recommendations that would stabilize the debt.
- If a budget resolution with instructions to stabilize the debt is not adopted by June 15th, the President’s proposal, or alternative proposals with a minimum levels of support (50 cosponsors in the House and 10 in the Senate) to achieve savings necessary to stabilize the debt, could be called up for a vote by any member
- Congress could not consider any legislation affecting revenues or mandatory spending until it passes legislation bringing the budget back within the targets