To provide a 1-week extension of the public debt limit.
Impact
The passage of HB3750 would ensure that the federal government can meet its immediate financial duties, thereby preventing a potential default that could have serious economic repercussions. It addresses the pressing issue of the statutory debt ceiling, which limits the total amount of money that the U.S. Treasury can borrow to cover obligations already incurred. By extending the debt ceiling temporarily, the legislation aims to stabilize public finances in the short term while Congress deliberates on broader fiscal policies.
Summary
House Bill 3750 aims to provide a temporary extension of the public debt limit by one week. This is a critical legislative measure designed to allow the federal government to manage its financial obligations without defaulting on existing debts. The bill specifically suspends subsection 3101(b) of title 31 of the United States Code, effectively permitting the government to issue additional obligations necessary for its financial operations for a limited period ending on June 12, 2023. This extension is intended to help maintain government operations as discussions around longer-term fiscal measures continue.
Contention
Discussions around HB3750 may reflect broader tensions related to government spending and fiscal responsibility. While supporters may argue that the extension is necessary to avoid a financial crisis, critics could express concerns regarding continually raising the debt limit without addressing underlying spending issues. The temporary nature of the extension suggests a recognition that long-term solutions to fiscal management must be pursued to prevent recurring negotiations over the debt limit in the future.
Full Faith and Credit Act This bill requires the Department of the Treasury to prioritize certain obligations if the federal debt limit is reached and provides for a limited increase in the debt limit to fund these priorities. If the federal government reaches the debt limit, the following obligations must be given equal priority over all other federal obligations: the principal and interest on the debt held by the public; Social Security benefits; pay and allowances for members of the Armed Forces on active duty and members of the U.S. Coast Guard; compensation, pensions, and payments for medical services provided by the Department of Veterans Affairs, and the Medicare programs. If the debt limit has been reached and incoming revenue will be insufficient to pay the priority obligations over an upcoming two-week period, the bill requires (1) Treasury to notify Congress of the expected revenue shortfall for the two-week period, and (2) the debt limit to be increased by the amount of the expected shortfall. If the incoming revenue exceeds the expected shortfall, the excess revenue must be held in reserve and applied to the following two-week period.
Default Prevention Act This bill requires the Department of the Treasury to continue borrowing to pay the principal and interest on obligations held by the public or the Social Security trust funds if the federal debt limit is reached. The bill also (1) exempts any obligations issued under this bill from the debt limit if the obligations would otherwise cause the limit to be exceeded, and (2) prohibits the obligations from being used to compensate Members of Congress.