Senator Rick Scott (R-Fla.) recently introduced S.1990, the Federal Debt Emergency Control Act. This bill establishes important reforms to address out of control spending while protecting the American people from tax increases.
The legislation is cosponsored by Senators Ted Cruz (R-Texas), Mike Braun (R-Ind.), Marsha Blackburn (R-Tenn.), Ron Johnson (R-Wis.), John Barrasso (R-Wyo.), Joni Ernst (R-Iowa), and Tommy Tuberville (R-Ala.).
In recent years, excessive federal spending has resulted in a substantial increase in budget deficits and federal debt. The Congressional Budget Office projects federal spending will reach 31.2 percent of GDP, or almost one-third of the entire economy. Federal debt will be 102 percent of GDP in 2021, or more than the entire annual economy.
This bill will help address this problem by requiring the Office of Management and Budget to declare a “federal debt emergency” if spending exceeds 100 percent of the GDP. Once this emergency is declared, all unobligated funding of stimulus bills (such as the American Rescue Plan) will be terminated and sent back to the Treasury General Fund immediately to reduce the deficit.
All legislation that increases the deficit (as determined by the CBO) that adds net new spending or increases the federal deficit, must carry its own offsets. If it does not, the legislation would require at least two-thirds of all Senators to vote to further increase the federal debt before being able to consider the bill – a high threshold that will disincentivize proposals that aren’t fully self-financed. This provision would also require the Senate to take a roll call vote on increasing the federal debt each time an unfinanced spending bill comes to the floor which will increase accountability on those who vote to raise our federal debt.
This bill would also protect against tax hikes by preventing them from being used as offsets. This will ensure politicians cannot use force American families and businesses to pay for more reckless federal spending. It will also allow the passing of tax cuts without needing a two-thirds vote to pass.
Democrats often push for job-killing, economy-hurting tax hikes instead of cutting spending. For instance, to fund his $6 trillion budget proposal, President Biden has proposed 30 different tax hikes, which would amount increase taxes by trillions of dollars.
Sen. Scott’s legislation would also encourage lawmakers to consider bills that help reduce the deficit. Bills introduced during the emergency declaration that reduce the deficit by at least 5 percent over the budget window and that do not increase taxes or fees would be subject to expedited approval and would have to be voted on within 30 days of introduction.
Senator Rick Scott has introduced the Federal Debt Emergency Control Act ahead of the expiration of federal debt limit suspension on July 31st. ATR urges lawmakers to co-sponsor and support this important piece of legislation that implements taxpayer protections and reins in ballooning deficits and federal debt.