ATR Supports H.R. 3442, “The Debt Management and Fiscal Responsibility Act”
Earlier this month, H.R. 3442, “The Debt Management and Fiscal Responsibility Act of 2015” was introduced by Congressman Kenny Marchant (R-Texas). This legislation reforms the debt limit framework to ensure that when the debt limit is increased, the administration has a clear plan to reduce the nation’s debt, rather than continuing to kick the fiscal can down the road. ATR supports this important legislation and urges all members of Congress to vote for this bill.
H.R. 3442 requires the Treasury Secretary to appear before the House Ways and Means and the Senate Finance Committee between 21 and 60 days before it is anticipated that the debt limit will be reached. Specifically, the Secretary will be required to present a detailed report outlining the nation’s financial state while also proposing substantive reforms.
Firstly, the Secretary will be required to report on the current state of the debt (including historical levels of debt, current composition of debt, and future debt projections).
Secondly, this bill will require the administration to propose detailed proposals to reduce the debt in the short-term, medium-term, and long-term.
Thirdly, the legislation requires the administration to project how increasing the debt limit will affect future spending, debt service, and the strength and stability of the U.S. dollar as the international reserve currency.
Lastly, the Secretary will be required to report projections of the long-term sustainability of mandatory entitlement programs including Social Security, Medicare, and Medicaid.
In addition, the legislation requires the Treasury Secretary to present progress reports on efforts to reduce the debt when returning to Congress to ask for future debt ceiling increases.
The Debt Management and Fiscal Responsibility Act creates a clear, yet comprehensive framework that any administration must follow to reduce federal debt when requesting a debt limit increase. By requiring the submission of a detailed report and comprehensive plan before Congress, H.R. 3442 ensures that increasing the debt ceiling only occurs as part of a framework of serious proposals to reform the nation’s finances and chart a pathway toward fiscal responsibility.