Democratic Representatives Jerrold Nadler (D-NY), Hank Johnson (D-GA), and Jim Moran (D-VA) introduced legislation today that would eliminate the federal debt ceiling. A spokesman for Nadler said that the heated negotiations to raise the debt ceiling in August — which resulted in Standard & Poor’s downgrading the United States’ credit rating for the first time ever — inspired the congressmen to introduce the Full Faith and Credit Act of 2011.
“The debt ceiling is truly arbitrary and has nothing to do with the deficit,” said Nadler. “The debt ceiling does not prevent the United States from incurring new debts, but has become a cudgel with which Republicans are holding our economy hostage and punishing the millions of Americans who are struggling. Let us abolish the debt ceiling and get to work, finally, on the critical needs of the American people: creating jobs and economic development, providing aid to states, building infrastructure, and instilling aggregate demand back into the economy.”
Moran echoed Nadler, arguing in a press release that the debt ceiling should be eliminated in light of “the ramifications of congressional Republicans’ irresponsible behavior.” Moran believes that the debt ceiling, which was created in its current form in 1939, “no longer serves a useful purpose yet has the potential to do great harm.”
Similarly, Johnson said that “Republicans in Congress undermined the economy and faith in the country by threatening to force default,” and the Full Faith and Credit Act of 2011 would “prevent politicians from holding the nation’s credit hostage ever again.”
The bill is unlikely to gain much traction in the Republican controlled House of Representatives; as The Hill points out, “members of the GOP were encouraged that they were able to use the debt ceiling as leverage” to advance their legislative agenda of deep spending cuts during the August negotiations. Congressional Republicans will probably want to keep the debt ceiling in place as a tool to force Democrats to give in to their demands in future negotiations.
Even if the Full Faith and Credit Act of 2011 is not passed, it still sends an important political signal that progressive Democrats remain upset over the handling of the debt ceiling debate. Furthermore, the fact that Nadler, Johnson, and Moran tied the bill so explicitly to the Republicans’ conduct during the debt ceiling debate suggests that, even if the debt reduction “supercommittee” comes up with an agreeable deal that passes through Congress, the debt debate is likely to remain a key issue going into the 2012 elections.