Proposing a Federal debt limit amendment to the Constitution of the United States.
Impact
If enacted, HJR104 would significantly impact federal fiscal policy and budgeting. It would require the U.S. government to significantly adjust its budget plans and spending to remain within the newly established debt limits. This could lead to potential cuts in federal spending or tax increases to ensure compliance, potentially affecting various government programs and services that rely on federal funding. Additionally, a requirement of a three-fifths majority in Congress to exceed the debt limit for specified reasons may lead to more stringent budgetary controls and could create challenges in funding key initiatives during emergencies.
Summary
HJR104 proposes an amendment to the United States Constitution that aims to set a limitation on the total amount of federal debt. Specifically, it stipulates that the maximum amount of debt held by the U.S. government, including both public and intragovernmental debt, cannot exceed 130 percent of the country's Gross Domestic Product (GDP) during the first fiscal year after the amendment's ratification. In subsequent years, this limit is set to decrease by 1 percent per year until reaching a cap of 120 percent of GDP, which would then remain the limit for future fiscal years.
Contention
Notably, there are implications regarding the amendment's ability to be waived during times of war or national emergency. HJR104 allows Congress to override the limits on debt for defense spending if formally declared by a joint resolution, which raises concerns about the flexibility of fiscal operations during critical times. Critics may argue that while the intent is to maintain fiscal discipline, the conditions under which Congress can circumvent these limits could be exploited, ultimately leading to unintended consequences in national economic stability.