[House Report 114-291]
[From the U.S. Government Publishing Office]


114th Congress   }                                       {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                       {     114-291

======================================================================



 
         DEBT MANAGEMENT AND FISCAL RESPONSIBILITY ACT OF 2015

                                _______
                                

October 7, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Ryan of Wisconsin, from the Committee on Ways and Means, submitted 
                             the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3442]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 3442) to provide further means of accountability of 
the United States debt and promote fiscal responsibility, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND...........................................2
          A. Purpose and Summary.................................     2
          B. Background and Need for Legislation.................     2
          C. Legislative History.................................     3
 II. EXPLANATION OF THE BILL..........................................4
          A. DEBT MANAGEMENT AND FISCAL RESPONSIBILITY ACT OF 
              2015...............................................     4
III. VOTES OF THE COMMITTEE...........................................5
 IV. BUDGET EFFECTS OF THE BILL.......................................5
          A. Committee Estimate of Budgetary Effects.............     5
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures Budget Authority......................     5
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................     6
  V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......6
          A. Committee Oversight Findings and Recommendations....     6
          B. Statement of General Performance Goals and 
              Objectives.........................................     7
          C. Information Relating to Unfunded Mandates...........     7
          D. Congressional Earmarks, Limited Tax Benefits, and 
              Limited Tariff Benefits............................     7
          E. Duplication of Federal Programs.....................     7
          F. Disclosure of Directed Rule Makings.................     7
 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............7
          A. Text of Existing Law Amended or Repealed by the 
              Bill, as Reported..................................     7
          B. Changes in Existing Law Proposed by the Bill, as 
              Reported...........................................     8
VII. DISSENTING VIEWS................................................10

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The ``Debt Management and Fiscal Responsibility Act of 
2015, H.R. 3442, as ordered reported by the Committee on Ways 
and Means on September 10, 2015, requires the Secretary of the 
Treasury (Treasury) to provide information on the debt, the 
fiscal outlook, and the Administration's plans to address debt 
and fiscal problems. More specifically, the bill requires the 
Secretary to appear before the House Ways and Means Committee 
and the Senate Finance Committee not more than 60 days and not 
less than 21 days prior to any date on which the Treasury 
Secretary anticipates that the nation will reach the debt 
limit. Total debt subject to the limit, which includes Treasury 
securities held by Federal trust funds and other accounts, 
currently stands at $18.1 trillion. The legislation would 
require the Treasury Secretary to present a Debt Report to 
Congress regarding the state of the public debt, including its 
composition and trajectory. The legislation would also require 
the Treasury Secretary to present a Statement of Intent which 
would contain a detailed explanation of proposals of the 
President to reduce the public debt. Lastly, when applicable, 
the Treasury Secretary would also present a progress report on 
the implementation of the Statement of Intent.

                 B. Background and Need for Legislation

    According to the Congressional Budget Office (CBO), ``the 
long-term outlook for the federal budget has worsened 
dramatically over the past several years, in the wake of the 
2007-2009 recession and slow recovery.''\1\ When studying the 
impact of debt on the economy, economists tend to look at a 
subset of the total debt known as debt held by the public. Debt 
held by the public is comprised almost entirely of marketable 
debt and currently amounts to $13.1 trillion.
---------------------------------------------------------------------------
    \1\Congressional Budget Office, ``The Long-Term Budget Outlook,'' 
June 16th 2015.
---------------------------------------------------------------------------
    In 2008, debt held by the public stood at 39 percent of 
GDP, close to its historical average, but has since risen to 74 
percent and is on pace to rise to 107 percent in 2040. CBO also 
states that if the trajectory of key variables changed (such as 
interest rates, mortality rates, federal spending on health 
care, and productivity growth), the debt to GDP ratio could 
rise to 141 percent in 2040.\2\ CBO deems these trends to be 
``unsustainable''.
---------------------------------------------------------------------------
    \2\Congressional Budget Office, ``The Long-Term Budget Outlook,'' 
June 16th 2015.
---------------------------------------------------------------------------
    The projected rise in the debt is driven by the rapid 
growth in entitlement spending and the net interest payments to 
service the growing debt. CBO summarizes the impact of 
entitlements and interest payments on the fiscal outlook in its 
latest long-term outlook by stating:

        ``Through-out the next decade, however, an aging 
        population, rising health care costs per person, and an 
        increasing number of recipients of exchange subsidies 
        and Medicaid benefits attributable to the Affordable 
        Care Act would push up spending for some of the largest 
        entitlement programs if current laws governing those 
        programs remained unchanged. Moreover, CBO expects 
        interest rates to rebound in coming years from their 
        current unusually low levels, raising the government's 
        interest payments on debt.''\3\

    \3\Congressional Budget Office, ``The Long-Term Budget Outlook,'' 
June 16th 2015.

    Given this outlook of historically high and rising debt, it 
is critical that Congress and the Administration to publicly 
discuss the drivers of our debt, its composition, trajectory, 
and how the United States will meet its debt obligations in the 
future. All of these factors should help to facilitate policies 
which improve the outlook for our nation's fiscal health. While 
House Republicans have managed to pass balanced budgets several 
years in a row, the Administration continues to propose budgets 
that never balance. This stark difference in priorities calls 
for a new communications framework surrounding the debt limit, 
one in which the Treasury Secretary presents to Congress the 
President's proposals to reduce the debt as well as the effects 
of unchecked borrowing.

                         C. Legislative History


Background

    The ``Debt Management and Fiscal Responsibility Act of 
2015, H.R. 3442, was introduced on September 8, 2015, and was 
referred to the Committee on Ways and Means.

Committee hearings

    The debt limit has been discussed on February 3, 2015 at a 
``Hearing on the President's Fiscal Year 2016 Budget,'' which 
featured Secretary Jack Lew. In addition, the committee held 
two hearings during the 113th Congress dedicated to the issue. 
The committee held a January 22, 2013 ``Hearing on the Debt 
Limit,'' which examined the Congress's borrowing power and 
operation of the debt limit. Additionally, the Oversight 
Subcommittee held an April 10, 2013 hearing, ``Examining the 
Government's Ability to Continue Operations When at the 
Statutory Debt Limit,'' which examined the government's ability 
to prioritize its obligations and continue operations should 
the U.S. Treasury reach its statutory debt limit and exhaust 
extraordinary measures.

Committee action

    The Committee on Ways and Means marked up H.R. 3442, the 
Debt Management and Fiscal Responsibility Act, on September 10, 
2015, and ordered the bill favorably reported (with a quorum 
being present).

                      II. EXPLANATION OF THE BILL


        A. Debt Management and Fiscal Responsibility Act of 2015


                              PRESENT LAW

    Several data sources and reports issued by Treasury, the 
Office of Management and Budget (OMB), CBO, and the Government 
Accountability Office (GAO), among others, contain information 
about the composition of the nation's debt and its 
unsustainable trajectory. However, there is no established 
framework that links such information, explicitly as it 
pertains to the debt limit, with a dedicated communication to 
Congress concerning the administration's plans to improve our 
fiscal outlook and to provide progress reports of actions 
taken.

                           REASONS FOR CHANGE

    The practice of raising the statutory debt limit without 
consideration of that which is driving the nation's debt and 
plans to reduce it is untenable. H.R. 3442 aims to establish a 
new debt limit communication framework that enhances 
accountability, reduces disruptive risk, and returns the focus 
to finding debt reduction solutions. The legislation requires 
the administration to appear before Congress prior to each 
potential debt limit increase and provide testimony and 
detailed reports on: the national debt and its key drivers; 
explicit short-, medium-, and long-term debt reduction 
proposals; and progress on debt reduction. This framework will 
increase transparency and reduce the uncertainty which often 
surrounds debt limit impasses.

                       EXPLANATION OF PROVISIONS

    Section 1 contains the short title of the bill. Subsection 
2(a) requires that the Secretary of the Treasury appear before 
the House Ways and Means Committee and the Senate Finance 
Committee not more than 60 days and not less than 21 days prior 
to any date on which the Treasury Secretary anticipates that 
the nation will reach the debt limit. Subsection 2(b) specifies 
the information the Treasury Secretary must present, which 
includes the following:
    --a Debt Report to Congress on the state of the national 
debt, including its composition and trajectory, as well as the 
Administration's plans to meet debt obligations in the event 
that Congress agrees to raise the debt limit.
    --a Statement of Intent on how the Administration proposes 
to reduce the debt and the debt to GDP ratio. Additionally, the 
statement would address the impacts of the increased limit on 
factors such as our reserve currency status and the 
sustainability of entitlements.
    --a Progress Report on the implementation of the Statement 
of Intent proposals by the Administration to reduce U.S. debt 
levels at subsequent appearances.

Subsection 2(c), states that when applicable, the Treasury 
Secretary shall present a progress report on the implementation 
of the Statement of Intent.

                             EFFECTIVE DATE

    The provision becomes effective upon enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 3442, the Debt Management and Fiscal 
Responsibility Act of 2015, on September 10, 2015.
    The bill, H.R. 3442 was ordered favorably reported by a 
roll call vote of 22 yeas to 14 nays (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea      Nay     Present      Representative      Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Ryan.........................       X   .......  .........  Mr. Levin..........  .......       X   .........
Mr. Johnson......................       X   .......  .........  Mr. Rangel.........  .......       X   .........
Mr. Brady........................       X   .......  .........  Mr. McDermott......  .......       X   .........
Mr. Nunes........................  .......  .......  .........  Mr. Lewis..........  .......       X   .........
Mr. Tiberi.......................       X   .......  .........  Mr. Neal...........  .......       X   .........
Mr. Reichert.....................       X   .......  .........  Mr. Becerra........  .......  .......  .........
Mr. Boustany.....................       X   .......  .........  Mr. Doggett........  .......       X   .........
Mr. Roskam.......................       X   .......  .........  Mr. Thompson.......  .......       X   .........
Mr. Price........................       X   .......  .........  Mr. Larson.........  .......       X   .........
Mr. Buchanan.....................       X   .......  .........  Mr. Blumenauer.....  .......       X   .........
Mr. Smith (NE)...................       X   .......  .........  Mr. Kind...........  .......       X   .........
Ms. Jenkins......................       X   .......  .........  Mr. Pascrell.......  .......       X   .........
Mr. Paulsen......................       X   .......  .........  Mr. Crowley........  .......       X   .........
Mr. Marchant.....................       X   .......  .........  Mr. Davis..........  .......       X   .........
Ms. Black........................       X   .......  .........  Ms. Sanchez........  .......       X   .........
Mr. Reed.........................       X   .......  .........
Mr. Young........................       X   .......  .........
Mr. Kelly........................       X   .......  .........
Mr. Renacci......................       X   .......  .........
Mr. Meehan.......................       X   .......  .........
Ms. Noem.........................       X   .......  .........
Mr. Holding......................       X   .......  .........
Mr. Smith (MO)...................       X   .......  .........
Mr. Dold.........................  .......  .......  .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 3442, as 
reported. The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 18, 2015.
Hon. Paul Ryan,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3442, the Debt 
Management and Fiscal Responsibility Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 3442--Debt Management and Fiscal Responsibility Act of 2015

    H.R. 3442 would require the Secretary of the Treasury to 
appear before the House Committee on Ways and Means and the 
Senate Committee on Finance not more than sixty days and not 
less than twenty-one days before the Secretary anticipates that 
borrowing by the Treasury will reach the legal debt limit. 
Under the bill, the Secretary would present a report on the 
status of the national debt, plans to reduce the debt, the 
effect of increasing the debt limit, and progress made to 
reduce the debt. Finally, the bill would require that report to 
be available to the public on the website of the Department of 
the Treasury.
    CBO estimates that implementing H.R. 3442 would cost less 
than $500,000 over the 2016-2020 period; such spending would be 
subject to the availability appropriated funds. The department 
already undertakes much of the work required for such a report. 
Because enacting the bill would not affect direct spending or 
revenues, pay-as-you go procedures do not apply.
    H.R. 3442 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was as a result of the 
Committee's review of the provisions of H.R. 3442 that the 
Committee concluded that it is appropriate to report the bill, 
as amended, favorably to the House of Representatives with the 
recommendation that the bill do pass.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program; 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139; or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED


  A. Text of Existing Law Amended or Repealed by the Bill, as Reported

    With respect to clause 3(e)(1)(A) of rule XIII of the Rules 
of the House of Representatives, the bill, as reported, 
includes no provisions proposing to repeal or amend an existing 
statute or part thereof.

        B. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                      TITLE 31, UNITED STATES CODE




           *       *       *       *       *       *       *
SUBTITLE III--FINANCIAL MANAGEMENT

           *       *       *       *       *       *       *


                        CHAPTER 31--PUBLIC DEBT


                    SUBCHAPTER I--BORROWING AUTHORITY

Sec.
3101. Public debt limit.
     * * * * * * *

                      SUBCHAPTER II--ADMINISTRATIVE

     * * * * * * *
3131. Report before reaching debt limit.

           *       *       *       *       *       *       *


SUBCHAPTER II--ADMINISTRATIVE

           *       *       *       *       *       *       *


Sec. 3131. Report before reaching debt limit

  (a) In General.--Not more than sixty days and not less than 
twenty-one days prior to any date on which the Secretary of the 
Treasury anticipates the public debt will reach the limit 
specified under section 3101, as modified by section 3101A, the 
Secretary shall appear before the Committee on Ways and Means 
of the House of Representatives and the Committee on Finance of 
the Senate, to submit the information described under 
subsection (b).
  (b) Information Required to Be Presented.--In an appearance 
described under subsection (a), the Secretary shall submit the 
following:
          (1) Debt report.--A report on the state of the public 
        debt, including--
                  (A) the historical levels of the debt, 
                current amount and composition of the debt, and 
                future projections of the debt;
                  (B) the drivers and composition of future 
                debt; and
                  (C) how, if the debt limit is raised, the 
                United States will meet debt obligations, 
                including principal and interest.
          (2) Statement of intent.--A detailed explanation of--
                  (A) proposals of the President to reduce the 
                public debt in the short term (the current and 
                following fiscal year), medium term 
                (approximately three to five fiscal years), and 
                long term (approximately ten fiscal years), and 
                proposals of the President to adjust the debt-
                to-gross domestic product ratio;
                  (B) the impact an increased debt limit will 
                have on future Government spending, debt 
                service, and the position of the United States 
                dollar as the international reserve currency; 
                and
                  (C) projections of fiscal health and 
                sustainability of major direct-spending 
                entitlement programs (including Social 
                Security, Medicare, and Medicaid).
          (3) Progress report.--
                  (A) In general.--A detailed report on the 
                progress of implementing all proposals of the 
                President described under subparagraph (A) of 
                paragraph (2).
                  (B) Exception.--The report described under 
                this paragraph shall only be submitted if a 
                Secretary has already appeared at least once 
                pursuant to this section during any term of 
                office for a particular President.
  (c) Public Access to Information.--The Secretary of the 
Treasury shall place on the homepage of the Department of the 
Treasury a link to a webpage that shall serve as a repository 
of information made available to the public for at least 6 
months following the date of release of the relevant 
information, including:
          (1) The debt report submitted under subsection 
        (b)(1).
          (2) The detailed explanation submitted under 
        subsection (b)(2).
          (3) The progress report submitted under subsection 
        (b)(3).
          (4) Such other information as the Secretary 
        reasonably believes is necessary or helpful to the 
        public in understanding the statutory debt limit, 
        Government debt, and the reports and explanations 
        described under paragraphs (1), (2), and (3).

           *       *       *       *       *       *       *


                         VII. DISSENTING VIEWS

    The Democratic Members of the Committee believe this bill's 
new statutory requirements for the Treasury Department are 
unnecessary and duplicate information Congress already 
receives. The Secretary of the Treasury regularly corresponds 
with our Committee about the debt limit, providing regular 
updates about the status of our ability to meet our obligations 
and the measures Treasury is taking, and appears before us 
regularly. The President's proposals to reduce the deficit and 
the debt, using a combination of spending cuts and revenue 
increases, have been clearly outlined in the budget submission 
each year, and Administration officials regularly make 
themselves available to discuss them.
    Further, if the Treasury Department were to generate a new 
report on the debt limit for the Secretary to discuss with us, 
it should focus on the most pressing issue--the catastrophic 
consequences of a default on our obligations. Nowhere in H.R. 
3442 does it even mention having Treasury provide Congress with 
estimates of the number of Americans who will be harmed if 
Congress fails to responsibly raise the debt limit.
    If Congress fails to raise the debt limit, Treasury may not 
be able to pay benefits to veterans who served our country 
loyally and well. We may not be able to pay doctors and 
hospitals who cared for Medicare patients. We may not be able 
to pay salaries to our troops, even those currently in harm's 
way. We may not be able to pay Pell Grants to students who need 
them to go to college. We may not be able to pay grants 
promised to researchers searching for cures to cancer and other 
terrible diseases. All these expenditures have already been 
authorized by Congress, but we know that if we don't act on the 
debt limit, we can't pay them all. We need Treasury's guidance 
to understand which Americans might pay the price first.
    The report envisioned by this bill also excludes any 
Treasury analysis of the catastrophic economic consequences of 
default that many outside experts have warned about.
    The information outlined above might be useful to Congress. 
The report envisioned by the bill would simply be repetitive 
and distracting from the real issue.
            Sincerely,
                                   Sander Levin.
                                   Charles B. Rangel.
                                   Jim McDermott.
                                   John Lewis.
                                   Richard E. Neal.
                                   Xavier Becerra.
                                   Lloyd Doggett.
                                   Mike Thompson.
                                   John B. Larson.
                                   Earl Blumenauer.
                                   Ron Kind.
                                   Bill Pascrell, Jr.
                                   Joseph Crowley.
                                   Danny K. Davis.
                                   Linda T. Sanchez.

                                  [all]