Proposing an amendment to the Constitution of the United States related to the public debt.
- Bill Number
- H.J.Res. 112
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Economics and Public Finance
- Status
- Introduced
- Latest Action
- 2025-08-15: Referred to the House Committee on the Judiciary.
- Last Updated
- 2025-09-05T16:12:26Z
AI-Generated Summary
Purpose
This joint resolution proposes a constitutional amendment to impose strict fiscal discipline on the federal government by requiring balanced budgets, limiting public debt increases, and restricting new taxes. The goal is to prevent excessive federal spending and borrowing without broad approval, promoting long-term financial stability.
Key Provisions
- Balanced Budget Requirement (Section 1): Federal government spending (outlays) cannot exceed revenue (receipts) at any time unless any deficit is financed solely by debt issued under the rules of this amendment.
- Initial Debt Limit (Section 2): The maximum allowable debt starts at 105% of the existing national debt on the amendment's effective date. This limit cannot be raised without state legislative approval as outlined in Section 3.
- Process for Increasing Debt (Section 3): Congress can propose a single-issue increase in the debt limit, which must be referred to state legislatures for approval. A simple majority of states must approve it within 60 days, without any conditions or incentives (like federal funding threats). If not approved, the proposal fails, and the debt limit remains unchanged.
- Enforcement Mechanism (Section 4): If outstanding debt reaches 98% of the limit, the President must publicly identify specific spending cuts (impoundment, meaning withholding appropriated funds) to stay under the limit. These cuts take effect after 30 days unless Congress overrides with equivalent or greater cuts via a concurrent resolution. Failure by the President to act is an impeachable offense (a serious violation warranting removal from office). Any debt issued beyond the limit is invalid.
- Tax Increase Restrictions (Section 5): Any new or higher general revenue tax (like income or sales taxes) requires a two-thirds majority vote in both houses of Congress. This does not apply to a national sales tax that fully replaces the income tax or to changes in tax exemptions, deductions, or credits.
- Definitions (Section 6): Clarifies terms such as "debt" (any obligation backed by the U.S. government's full credit), "outstanding debt" (total debt held anywhere), "impoundment" (withholding spending), and "general revenue tax" (federal income, sales, or value-added taxes, excluding tariffs).
- Implementation (Section 7): The amendment takes effect immediately upon ratification by three-fourths of states (within seven years) and is self-enforcing, though Congress can pass supporting laws.
Significant Changes to Existing Law
- Introduces a constitutional balanced budget rule, which does not currently exist; the federal government operates under statutory debt ceilings that Congress routinely adjusts.
- Shifts debt limit authority from Congress alone to require approval by a majority of state legislatures, a novel involvement of states in federal fiscal policy.
- Revives presidential impoundment powers (previously limited by the 1974 Impoundment Control Act), making it mandatory for debt enforcement and tying non-compliance to impeachment.
- Imposes a two-thirds supermajority for most tax hikes, raising the bar beyond the current simple majority requirement and exempting only a full income tax replacement with a sales tax.
Potential Impacts
- On Government Agencies: Could force automatic spending reductions (impoundments) near debt limits, disrupting federal programs, agencies, and contracts; may lead to more predictable budgeting but with risks of abrupt cuts.
- On Citizens: Might stabilize long-term debt and reduce future tax burdens, but could limit funding for services like Social Security, healthcare, or infrastructure; higher taxes would face steeper hurdles, potentially shifting burdens to sales taxes.
- On International Relations: A rigid debt limit might signal fiscal conservatism, boosting U.S. credit ratings, but repeated impoundments or failed increases could raise doubts about U.S. reliability, affecting global markets, bond sales, and alliances dependent on U.S. aid.
Main Stakeholders Affected
- Federal Government: Congress (loses unilateral debt control, faces supermajority tax votes), President (gains enforcement duties but risks impeachment), and agencies (subject to potential impoundments).
- State Governments: Gain veto-like power over federal debt increases, influencing national fiscal policy but adding administrative burdens.
- Citizens and Taxpayers: Directly impacted by spending limits and tax rules, potentially benefiting from fiscal restraint but facing reduced services.
- Financial Markets and Creditors: Holders of U.S. debt (domestic and foreign) could see volatility from enforcement actions, affecting interest rates and investments.
Notable Legal, Constitutional, or Political Implications
- Constitutional: Alters the balance of powers by empowering states in federal matters (federalism shift) and mandating executive impoundment, which could face challenges under separation of powers doctrines; self-enforcing nature limits judicial override.
- Legal: Defines impeachable offenses more explicitly for fiscal inaction; voids unauthorized debt, potentially leading to lawsuits over contract breaches or economic harm.
- Political: May cause gridlock in divided governments, as state approvals could politicize debt ceilings; encourages conservative budgeting but risks shutdown-like crises; ratification process itself is politically divisive, requiring broad bipartisan state support.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2025-08-15: Referred to the House Committee on the Judiciary.
- 2025-08-15: Introduced in House
- 2025-08-15: Introduced in House
Bill Versions
- Proposing an amendment to the Constitution of the United States related to the public debt. — issued 2025-08-15 — PDF (4 pages)