Proposing a Federal debt limit amendment to the Constitution of the United States.

Bill Number

H.R. 37

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Economics and Public Finance

Status

Introduced

Latest Action

2025-01-03: Referred to the House Committee on the Judiciary.

Last Updated

2025-02-06T15:14:53Z

AI-Generated Summary

Purpose

This bill (H.R. 37) proposes a constitutional amendment to impose a strict limit on the total federal debt of the United States, tying it to a percentage of the Gross Domestic Product (GDP, a measure of the country's total economic output). The goal is to promote fiscal responsibility by capping debt growth and requiring congressional approval to exceed limits, except in specific emergencies like war.

Key Provisions

• Debt Limit Structure (Section 1): In the first fiscal year after ratification, total federal debt (including public and internal government debt) cannot exceed 130% of GDP. This limit decreases by 1% each year until it reaches 120% of GDP, which becomes the permanent cap.
• Exceeding the Limit (Section 2): Congress can allow debt to go above the cap only if three-fifths (60%) of members in both the House and Senate approve it via a roll-call vote, specifying the excess amount and reasons for each fiscal year.
• Presidential Budget Requirement (Section 3): Before each fiscal year, the President must submit a budget to Congress that keeps total debt within the 120% GDP limit, covering the current year and the next five years.
• Waivers for Military Needs (Section 4): The debt limit can be waived for defense spending during a declared war or if Congress passes a joint resolution (by simple majority) declaring an imminent military threat to national security. Waivers must be specific to the extra costs of the conflict and limited to that fiscal year.
• Implementation (Section 5): Congress must pass laws to enforce the amendment, using estimates of government spending (outlays) and revenues (receipts).
• GDP Definition (Section 6): GDP is defined as the sum of personal consumption, investment, government spending, and net exports (exports minus imports), calculated by the Bureau of Economic Analysis or its successor.
• Effective Date (Section 7): The amendment takes effect in the third fiscal year after ratification by three-fourths of state legislatures, with a seven-year window for ratification.

Significant Changes to Existing Law

• Unlike the current statutory debt ceiling (a flexible limit set by Congress that can be raised or suspended as needed), this would embed a rigid, GDP-based debt cap directly into the U.S. Constitution, making it much harder to change without a new amendment.
• It introduces mandatory supermajority votes (three-fifths) for exceeding the limit in non-emergency situations, raising the bar from the simple majority often used today for debt ceiling adjustments.
• Adds a new presidential obligation to propose debt-compliant budgets, shifting from the current process where budgets focus more on spending and revenue without a constitutional debt constraint.

Potential Impacts

• On Government Agencies: Federal agencies may face stricter budgeting, potentially leading to reduced funding for programs if debt limits force cuts in spending or increases in taxes/revenue.
• On Citizens: Could promote long-term economic stability by curbing excessive borrowing, but might result in higher taxes, reduced government services (e.g., Social Security, healthcare), or delayed infrastructure projects if limits are hit.
• On International Relations: As the U.S. is a major global borrower, a binding debt limit could enhance perceptions of fiscal discipline and strengthen the dollar's role, but risks of default or spending cuts might unsettle international markets, allies, or creditors like foreign governments holding U.S. debt.

Main Stakeholders Affected

• Congress: Bears primary responsibility for enforcement, waivers, and approvals, potentially leading to more partisan debates over budgets.
• President and Executive Branch: Required to submit compliant budgets; agencies like the Treasury and Bureau of Economic Analysis would handle implementation and GDP calculations.
• Citizens and Taxpayers: Directly impacted by any fiscal adjustments, such as changes to taxes or benefits.
• State Governments: Involved in ratification process; may indirectly affect state-federal funding dynamics.
• International Creditors and Investors: Holders of U.S. debt (e.g., foreign governments, pension funds) could see altered borrowing patterns affecting global finance.

Notable Legal, Constitutional, or Political Implications

• Constitutional: This would be a rare amendment altering fiscal powers (allocated to Congress under Article I), potentially limiting future Congresses' flexibility and requiring broad state approval (38 of 50 states) to become law—historically challenging, as only 27 amendments have succeeded.
• Legal: Relies on economic estimates, which could lead to disputes over GDP calculations or enforcement, possibly resulting in court challenges if Congress fails to implement it adequately.
• Political: Likely to spark debates on fiscal policy, with supporters viewing it as a check on "runaway" spending and opponents arguing it could hinder responses to economic crises (e.g., recessions or pandemics) by tying hands during non-military emergencies; may influence election-year budget fights.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Yakym, Rudy [R-IN-2]

Recent Actions

• 2025-01-03: Referred to the House Committee on the Judiciary.
• 2025-01-03: Introduced in House
• 2025-01-03: Introduced in House

Bill Versions

• Proposing a Federal debt limit amendment to the Constitution of the United States. — issued 2025-01-03 — PDF (3 pages)