Barr Introduces Legislation to Reform Debt Ceiling Process and Reduce Spending
WASHINGTON – Today, Congressman Barr introduced H.R. 4021, the Debt Limit Reform and Congressional Pay for Performance Act of 2014, which creates a new formula for establishing the debt ceiling based on the size of the economy and a declining schedule of spending targets.
“It is no secret that the current debt limit law is a failure that does nothing to actually limit spending or remove the threat of default,” said Congressman Barr. “It is time to stop allowing politicians to spend money today only to worry about how to pay for it tomorrow. I have introduced legislation to change the way Washington works by advancing a new, much-needed solution that will hold politicians accountable, promote economic growth and job creation, and restrain future spending without threatening default of past obligations.”
H.R. 4021, the Debt Limit Reform and Congressional Pay for Performance Act of 2014, suspends the current process for establishing the debt ceiling, which is based on a total debt figure, and replaces it with a new formula based on the ratio of U.S. debt to gross domestic product (GDP). By tying this new debt ceiling formula to the size of the economy, H.R. 4021 combines the need for lawmakers to focus on growing the economy with the need to restrain spending.
An enforcement penalty tied to the pay of Members of Congress would be triggered should Congress fail to meet the fiscal sustainability target in a particular year. Specifically, the compensation of Members of Congress would be reduced by the same percentage as the difference between the target debt-to-GDP ratio and the actual debt-to-GDP ratio.