Dollar-for-Dollar Deficit Reduction Act

Bill Number

S. 4173

Origin Chamber

Senate

Congress

119th Congress, Session 2

Policy Area

Economics and Public Finance

Status

Introduced

Latest Action

2026-03-24: Read twice and referred to the Committee on the Budget. (text: CR S1582-1583)

Last Updated

2026-07-08T18:13:18Z

AI-Generated Summary

Dollar-for-Dollar Deficit Reduction Act (S. 4173)

Purpose

This bill aims to ensure fiscal responsibility by requiring any increase or suspension of the U.S. public debt limit (the legal cap on government borrowing) to be offset by equal or greater cuts in federal spending over the current fiscal year and the next 10 years.

Key Provisions

• Treasury Warning and Presidential Requirements (amends 31 U.S.C. § 3101B):
• Secretary of the Treasury must issue a "debt limit warning" to key congressional committees when a breach is near (within 60 days, even with "extraordinary measures" like delaying payments).
• Any presidential request to raise the debt limit must include proposed legislation for spending cuts equal to or greater than the increase amount. Cuts are calculated against a standard budget baseline (excluding extrapolated emergency spending), and net interest savings do not count.
• Congressional Points of Order (adds to Congressional Budget and Impoundment Control Act of 1974):
• Debt Limit Increases (§ 316): Bills raising the debt limit are blocked unless they include equal net spending reductions over 10 years, as scored by the Congressional Budget Office (CBO). CBO estimates must be public for 24 hours before a vote; "timing shifts" (moving spending outside the 10-year window) do not count.
• Debt Limit Suspensions (§ 317): Similar rule, but cuts must equal the projected debt growth during the suspension period (difference between start and end debt levels per CBO).
• In the Senate, these points of order require a three-fifths (60%) supermajority vote to waive or overrule.

Significant Changes to Existing Law

• Introduces mandatory "dollar-for-dollar" spending cuts for debt limit actions, unlike current law which allows raises or suspensions without offsets.
• Adds enforceable congressional points of order (procedural blocks) with supermajority waivers only in the Senate (House follows standard rules).
• Standardizes calculations using CBO baselines from the Balanced Budget and Emergency Deficit Control Act, excluding emergency spending projections and interest savings.

Potential Impacts

• Government Agencies: Could delay or prevent debt limit hikes, forcing Treasury to use extraordinary measures more often; pressures agencies for spending cuts.
• Citizens: May reduce federal spending on programs (e.g., entitlements, discretionary items), potentially affecting services but aiming to curb long-term deficits and debt.
• International Relations: Might signal U.S. fiscal discipline to global markets, but repeated standoffs could raise borrowing costs or erode confidence in U.S. Treasuries.

Main Stakeholders Affected

• Congress: Must include spending cuts in debt bills or face procedural blocks.
• President and Treasury Department: Required to propose offsets with requests.
• Congressional Budget Office (CBO): Gains role in scoring and projecting debt for enforcement.
• Taxpayers and Program Beneficiaries: Indirectly impacted by required spending reductions.
• Financial Markets: Sensitive to debt limit debates and outcomes.

Notable Legal, Constitutional, or Political Implications

• Legal: Creates binding procedural hurdles in Congress, enforceable via points of order; relies on CBO for neutral scoring to avoid disputes.
• Constitutional: Aligns with Congress's power of the purse (Article I) by linking borrowing authority to spending control; does not alter debt limit itself.
• Political: Likely increases leverage in budget negotiations, potentially causing gridlock without 60 Senate votes, but promotes bipartisan spending restraint. Short title emphasizes "deficit reduction" theme.

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

Sponsor

Sen. Barrasso, John [R-WY]

Cosponsors (1)

Sen. Lummis, Cynthia M. [R-WY]

Recent Actions

• 2026-03-24: Read twice and referred to the Committee on the Budget. (text: CR S1582-1583)
• 2026-03-24: Introduced in Senate

Bill Versions

• Dollar-for-Dollar Deficit Reduction Act — issued 2026-03-24 — PDF (9 pages)