Order Code RS21519
Updated February 11, 2005
CRS Report for Congress
Received through the CRS Web
Legislative Procedures for Adjusting the
Public Debt Limit: A Brief Overview
Robert Keith
Specialist in American National Government
Government and Finance Division
Bill Heniff Jr.
Analyst in American National GovernmentNovember 24, 2008
Legislative Procedures for Adjusting the
Public Debt Limit: A Brief Overview
Bill Heniff Jr.
Analyst on the Congress and Legislative Process
Government and Finance Division
Summary
Almost all borrowing by the federal government is conducted by the Treasury
Department, within the restrictions established by a single, statutory limit on the total
amount of debt that may be outstanding at any time. Most adjustments to the debt limit
have been increases, but sometimes the change has been a reduction.
The annual budget resolution includes recommended levels of the public debt limit
for each fiscal year covered by the resolution. Because a budget resolution does not
become law, Congress and the President must enact legislation in order to implement
budget resolution policies. The House and Senate may develop legislation and consider legislation
adjusting the
debt limit in any one of three ways: (1) under regular legislative
procedures in both
chambers, either as freestanding legislation or as a part of a measure
dealing with other
topics; (2) pursuant to the House’sHouse Rule XXVII (the so-called Gephardt rule
rule); or (3) as part of the budget
reconciliation process provided for under the
Congressional Budget Act of 1974.
During the period from 1940 to the present, a total of 84 debt-limit measures were
enacted into law — 68
Congress and the President have enacted a total of 88 measures adjusting the public debt
limit — 70 under regular legislative procedures in both chambers, 1214 under
the Gephardt rule, and 4 under reconciliation procedures.
President Bush’s budget for FY2006 estimates the debt limit for that fiscal year at
$8.673 trillion, nearly $500 billion higher than the current limit. Accordingly, Congress
and the President are expected to have to enact an increase in the debt limit by late this
session or early next session
rule, and 4 under reconciliation procedures. The current debt limit is $11.315 trillion.
This report will be updated as developments warrant.
Almost all borrowing by the federal government is conducted by the Treasury
Department, within the restrictions established by a single, statutory limit on the total
Congressional Research Service { The Library of Congress
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amount of debt that may be outstanding at any time.1 In a few instances, agencies such
as the Tennessee Valley Authority operate within their own borrowing limits established
separately in law. For years, the public debt limit has been codified in Section 3101(b)
of Title 31, United States Code. Periodic adjustments in the debt limit take the form of
1
For a discussion of federal debt, the debt limit, and debt management practices, see the Office
of Management and Budget, Budget of the United States Government, Fiscal Year 2009,
Analytical Perspectives, Chapter 16 — Federal Borrowing and Debt, Feb. 2008, pp. 229-241.
For an additional discussion of issues related to increasing the debt limit, see CRS Report
RL31967, The Debt Limit: History and Recent Increases, by D. Andrew Austin.
CRS-2
amendments to 31 U.S.C. 3101(b), usually by striking the current dollar limitation and
inserting a new one. While most adjustments to the debt limit have been increases, in
some instances the debt limit has been reduced or extended at its current level for a
specified interval.2
The Congressional Budget Act of 1974 (P.L. 93-344, as amended2 U.S.C. 601-688) requires the
House and Senate to adopt a concurrent resolution on the budget each year before
considering revenue, spending, and debt-limit legislation. In addition to recommending
the appropriate levels of total revenues, spending, and the deficit or surplus, the budget
resolution also specifies the appropriate level of the debt limit for each fiscal year covered
by the measure. Inasmuch as a budget resolution does not become law, Congress and the
President must enact legislation implementing budget resolution policies, including any
needed adjustment in the debt limit. Even if a budget resolution is not adopted by the
House and Senate, as occurred in 1998, 2002, 2004, and 2006and 2004, legislation must be enacted to
to raise the debt limit whenever it becomes insufficient.
Under current legislative procedures, the House and Senate may develop legislation
and
consider legislation adjusting the debt limit in any one of three ways: (1) under regular
legislative procedures
in both chambers, either as freestanding legislation or as a part of
a measure dealing with
other topics; (2) pursuant to the House’sHouse Rule XXVII (the so-called
Gephardt rule); or (3) as part of the
budget reconciliation process provided for under the
Congressional Budget Act of 1974.
While the Constitution requires that revenue
measures originate in the House, this
requirement is not considered to apply to debt-limit
measures.3 Over the years, however,
most debt-limit legislation has originated in the
House. In 2002 and 2004, a SenateoriginatedSenate-originated bill was the vehicle for the debt-limit
increase. The House Ways and Means
Committee and the Senate Finance Committee
exercise jurisdiction over debt-limit
legislation.
It is extremely difficult for Congress to effectively influence fiscal and budgetary
policy through action on legislation adjusting the debt limit. The need to raise (or lower)
the limit during a session is driven by many previous decisions regarding revenues and
spending stemming from legislation enacted earlier in the session or in prior years.
1
For a discussion of federal debt, the debt limit, and debt management practices, see the Office
of Management and Budget, Budget of the United States Government, Fiscal Year 2006,
Analytical Perspectives, Chapter 16 — Federal Borrowing and Debt, Feb. 2005, pp. 245-259.
Also, see CRS Report RL31967, The Debt Limit: The Ongoing Need for Increases, by Philip D.
Winters.
2
For example, P.L. 455 of the 79th Congress (60 Stat. 316; June 26, 1946) reduced the debt limit
from $300 billion to $275 billion as budget surpluses reemerged following World War II, and
P.L. 101-461 (104 Stat. 1078; October 25, 1990) extended the current debt limit level of $3.195
trillion for three days (as part of a series of short-term extensions) while a budget summit was
underway.
3
See the discussion on pages 16 and 17 of CRS Report RL31399, The Origination Clause of the
U.S. Constitution: Interpretation and Enforcement, by James V. Saturno.
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Nevertheless, the consideration of debt-limit legislation often is viewed as an opportunity
to reexamine fiscal and budgetary policy and is marked by controversy. Consequently,
House and Senate action on legislation adjusting the debt limit often is complicated,
hindered by political difficulties, and subject to delay.
As shown in Figure 1, a total of 84 debt-limit measures were enacted into law during
the period from 1940 to the present. The number of laws rose steadily from the decade
of the 1950s through the decade of the 1980s, from 6 to 24, but dropped to 13 in the past
decade. Six of the 13 laws enacted in the 1990s were temporary extensions over a threemonth
Nevertheless, the consideration of debt-limit legislation often is viewed as an opportunity
to reexamine fiscal and budgetary policy and is marked by controversy. Consequently,
House and Senate action on legislation adjusting the debt limit often is complicated,
hindered by political difficulties, and subject to delay.
As shown in Figure 1, a total of 88 debt-limit measures were enacted into law during
the period from 1940 to the present. The number of laws rose steadily from the decade
of the 1950s through the decade of the 1980s, from 6 to 24, but dropped to 13 in the
1990s. Six of the 13 laws enacted in the 1990s were temporary extensions over a three-
2
For example, P.L. 455 of the 79th Congress (60 Stat. 316; June 26, 1946) reduced the debt limit
from $300 billion to $275 billion as budget surpluses reemerged following World War II, and
P.L. 101-461 (104 Stat. 1078; October 25, 1990) extended the current debt limit level of $3.195
trillion for three days (as part of a series of short-term extensions) while a budget summit was
underway.
3
See the discussion on pages 16 and 17 of CRS Report RL31399, The Origination Clause of the
U.S. Constitution: Interpretation and Enforcement, by James V. Saturno.
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month period in 1990, enacted largely to accommodate lengthy negotiations during a
budget summit between Congress and the President. ThreeSeven debt-limit laws have been
enacted so far in this decade.
Figure 1. Number of Debt-Limit Measures Enacted
Into LawMeasures Adjusting the Public Debt Limit
Enacted by Decade: 1940s to the Present
SourceNumber of Measures Enacted
30
24
25
20
18
15
13
13
10
7
7
6
5
0
1940s
1950s
1960s
1970s
1980s
1990s
2000s
Decade
Sources: Office of Management and Budget, Budget of the United States Government,
Fiscal Year 2006, 2009,
Historical Tables, Table 7.3, Feb. 20052008, pp. 121-124130-133; and the Legislative Information System (LIS) of the
U.S. Congress [www.congress.gov].
As mentioned previously, debt-limit legislation may be considered under regular
legislative procedures in both chambers, pursuant to the House’s so-called Gephardt rule,
or as part of the budget reconciliation process. Of the total 8488 debt-limit measures
enacted enacted
into law during the period from 1940 to the present, 6870 were enacted under
regular considered under regular
legislative procedures, 1214 were enactedinitiated pursuant to the Gephardt rule, and four
were enacted were
considered as part of omnibus budget reconciliation legislation. Compared to regular
legislative procedures, the Gephardt rule accelerates action in the House (but not the
Senate) and the budget reconciliation process expedites consideration in both chambers.
Table 1, at the end of this report, provides information on the 16 debt-limit measures
enacted into law13 measures adjusting
the public debt limit enacted during the period from 1990 to the present. Debt-limit increases were
enacted three times in omnibus budget reconciliation legislation and once pursuant to the
Gephardt rule. In the remaining 12 instances, debt-limit increases1993 to the present. Of these 13
measures, eight were considered under
regular legislative procedures in both chambers,
either as freestanding legislation (five
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timesthree measures) or as part of legislation involving other matters (four continuing appropriations
acts, two measures dealing with the timely payment of Social Security benefits, and the
Contract with America Advancement Act).
The three ways of developing
matters (five measures), three were initiated pursuant to the Gephardt rule, and two were
considered as part of omnibus budget reconciliation legislation.
The three ways of developing and considering debt-limit legislation are discussed
briefly below.
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Regular Legislative Procedures in Both Chambers. The House Ways and
Means Committee and the Senate Finance Committee may originate measures adjusting
the debt limit at any time. The Senate usually acts on legislation originated by the House.
In 2002 and 2004, however, the Senate originated debt-limit bills (S. 2578 and S. 2986,
respectively), which became P.L. 107-199 and P.L. 108-415.
Consideration of debt-limit measures in the House usually is subject to special rules,
reported by the House Rules Committee, that may include debate limitations, restrictions
on the offering of amendments, and other expediting features. In the Senate,
consideration consideration
of debt-limit measures generally is not subject to expediting procedures;
nongermane nongermane
amendments may be offered and the measures may be debated at length,
unless cloture is invoked. The Senate sometimes has considered debt-limit measures for
days and amended them with controversial, substantive provisions. In 1985, for example,
the Senate added extensive budget enforcement procedures (the Balanced Budget and
Emergency Deficit Control Act of 1985, also known as the “Gramm-Rudman-Hollings
Act”) to H.J.Res. 372, a measure that the House had originated under the Gephardt rule.
On June 22, 2004, the House incorporated a debt-limit “placeholder” into the
Defense Appropriations Act for FY2005 (H.R. 4613) under the terms of H.Res. 683, a
self-executing rule. The purpose of the placeholder was to allow a specific increase in the
debt limit to be included in the conference report on the appropriations measure, thereby
avoiding a separate vote on the matter, but the Senate did not pursue this strategy. The
Senate originated a debt-limit measure, S. 2986, passing the bill by a vote of 52-44 on
November 17, 2004. The House passed the measure, without amendment, the next day
by a vote of 208-204. President Bush signed it into law on November 19 as P.L. 108-415.
The act raised the debt limit by $800 billion, from $7.384 trillion to $8.184 trillion.
Gephardt Rule Procedures. Debt-limit legislation may be developed under unless cloture is
invoked or other limitations are agreed to by unanimous consent.
The most recent adjustment to the public debt limit (Section 122, Div. A, P.L. 110343), for instance, was considered under the regular legislative process as part of the
economic stabilization legislation. The Senate, on October 1, 2008, added an increase to
the public debt limit, among other provisions related to the proposed troubled assets relief
program, as an amendment to mental health parity legislation (H.R. 1424) under the terms
of a unanimous consent agreement. The House subsequently, under the terms of a special
rule (H.Res. 1525), agreed to the legislation without change on October 3. President
George W. Bush signed the legislation on the same day.
Gephardt Rule Procedures. Debt-limit legislation may be initiated pursuant to
House Rule XXVII, commonly referred to as the Gephardt rule (named after its author,
Representative Richard Gephardt).4 The Gephardt rule was established by P.L. 96-78 (93
Stat. 589-591; September 29, 1979) and first applied in calendar year 1980. It provides
for the automatic engrossment and transmittal to the Senate, upon the adoption of the
budget resolution, of a joint resolution changing the public debt limit by the amount
recommended in the budget resolution. The joint resolution is deemed to have passed the
House by the same vote as the conference report on the budget resolution. The Senate has
no comparable procedure; if it chooses to consider such a House-passed joint resolution,
it does so under the regular legislative process.
The Gephardt rule originally was designated as House Rule XLIX. The House
recodified the rule as House Rule XXIII at the beginning of the 106th Congress, repealed
4
For further information, see CRS Report RL31913, Developing Debt-Limit Legislation: The
House’s “Gephardt Rule,” by Bill Heniff Jr.
CRS-5
it at the beginning of the 107th Congress, and reinstated it, as new Rule XXVII, at the
beginning of the 108th Congress.
In 12 of the 24 calendar years from 1980 to the present, the House originated 16 joint
resolutions under this procedure; 12 of them were enacted into law. The Senate took
action on 13Since the rule was established in 1980, the House has originated 19 joint resolutions
under this procedure. The Senate passed 15 of these joint resolutions, passing eight10 without
amendment and five with
amendments. On April 11, 2003, pursuant to the adoption of the FY2004 budget
resolution (H.Con.Res. 95), the House originated H.J.Res. 51 under this procedure. The
Senate passed the measure on May 23, without amendment, and President George W.
Bush signed it into law on May 27 (P.L. 108-24; 117 Stat. 710). The act increased the
debt limit by $984 billion, to $7.384 trillion.
During the remaining 12 years of this period (calendar years 1988, 1990-1991, and
1994-2002), the rule did not apply due to its suspension or repeal. In most cases, the
House suspended the rule because legislation changing the statutory limit was not
necessary at the time. The automatic engrossment of H.J.Res. 51 in 2003 marked the first
time since 1993 that a measure originated under the Gephardt rule. No such measure has
been automatically engrossed in 2004 because the House and Senate have not reached
final agreement on the FY2005 budget resolution (S.Con.Res. 95).
The Budget Reconciliation Process. The budget reconciliation process is an
optional procedure, authorized by Section 310 of the Congressional Budget Act of 1974,
that operates as an adjunct to the budget resolution process.5 The chief purpose of the
reconciliation process is to enhance Congress’s ability to change current law in order to
bring revenue, mandatory spending, and debt-limit levels into conformity with the policies
of the budget resolution. Reconciliation legislation is subject to expedited consideration
in both chambers. In the Senate, in particular, debate on reconciliation legislation is
limited, amendments must be germane, and extraneous matter is barred.
Reconciliation was first used by the House and Senate in 1980 for FY1981. As an
optional procedure, it has not been used every year. During the period covering FY1981
through FY2003, 15 omnibus reconciliation measures were enacted into law and three
were vetoed. While the predominant focus of reconciliation legislation has been to
change revenue and spending levels, four such measures also were used to adjust the debt
amendments. Of the remaining four joint resolutions, the Senate
began consideration on one but came to no resolution on it and took no action on three.
Of the 19 joint resolutions originated by the House under the Gephardt rule, 14 were
enacted into law. The most recent one enacted into law, H.J.Res. 43, originated in the
House pursuant to the adoption of the FY2008 budget resolution (S.Con.Res. 21) on May
17, 2007. The Senate passed the measure on September 27, 2007, without amendment,
and President Bush signed it into law on September 29 (P.L. 110-91; 121 Stat. 988).
4
For further information, see CRS Report RL31913, Developing Debt-Limit Legislation: The
House’s “Gephardt Rule,” by Bill Heniff Jr.
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In 14 years during this period (calendar years 1988, 1990-1991, 1994-2002, 2004,
and 2006), the rule did not apply or was not used due to its suspension or repeal, or a
budget resolution was not finally agreed to. In most cases, the House suspended the rule
because legislation changing the statutory limit was not necessary at the time.
The Senate has no comparable procedure. If the Senate chooses to consider a House
joint resolution originated pursuant to the Gephardt rule, it does so under the regular
legislative process. The Senate sometimes has considered such debt-limit measures for
days and amended them. In 1985, for example, the Senate added extensive budget
enforcement procedures (the Balanced Budget and Emergency Deficit Control Act of
1985, also known as the “Gramm-Rudman-Hollings Act”) to H.J.Res. 372, a measure that
the House had originated under the Gephardt rule.
The Budget Reconciliation Process. The reconciliation process is an optional
procedure that operates as an adjunct to the budget resolution process.5 The chief purpose
of the reconciliation process is to enhance Congress’s ability to change current law in
order to bring revenue, mandatory spending, and debt-limit levels into conformity with the
policies of the budget resolution. Reconciliation legislation is subject to expedited
consideration in both chambers. In the Senate, in particular, debate on reconciliation
legislation is limited, amendments must be germane, and extraneous matter is barred.
While the predominant focus of reconciliation legislation has been to change revenue
and spending levels, four such measures also were used to adjust the debt limit:
!
!
!
!
5
the Omnibus Budget Reconciliation Act of 1986 (P.L. 99-509; October
21, 1986), Section 8201 (100 Stat. 1968);
the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508;
November 5, 1990), Section 11901 (104 Stat. 1388-560);
the Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66; August
10, 1993), Section 13411 (107 Stat. 565); and
the Balanced Budget Act of 1997 (P.L. 105-33; August 5, 1997),
Section Section
5701 (111 Stat. 648).
For more information on the reconciliation process, see CRS Report RL30458RL33030, The Budget
Reconciliation Process: Timing of Legislative Action, by Robert KeithHouse and Senate Procedures, by Robert Keith and Bill Heniff Jr.
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Table 1. LawsLegislation Adjusting the Public
Debt Limit
Enacted From 1990 to the Present
Public Law
Number
Statutes-at-Large
Citation
Date
Enacted
101-350
104 Stat. 403
08-09-90
Debt-limit increase
Temporary
101-405
104 Stat. 878
10-02-90
Debt-limit increase
Temporary
increase
101-412
104 Stat. 894
10-09-90
Continuing resolution
Temporary
increase
101-444
104 Stat. 1030
10-19-90
Continuing resolution
Temporary
increase
101-461
104 Stat. 1075
10-25-90
Continuing resolution
Temporary
increase
101-467
104 Stat. 1086
10-28-90
Continuing resolution
Temporary
increase
101-508
104 Stat. 1388-560
11-05-901993 to the Present
Bill Number
Procedure
Type of Act
Nature of
Adjustment
Public Law
(Date Enacted)
H.R. 1430
Regular legislative
procedures
Debt-limit increase
Temporary increase
P.L. 103-12
(04-06-1993)
H.R. 2264
Reconciliation
process
Omnibus budget
reconciliation
Permanent
increase
103-12
107 Stat. 42
04-06-93
Debt-limit increase
Temporary
increase
103-66
107 Stat. 312
08-10-93
Omnibus budget
reconciliation
Permanent
increase
104-103
110 Stat. 55
02-08-96
Timely payment of
Social Security
benefits
Temporary
exemption
for certain
borrowing
104-115
110 Stat. 825
03-12-96
Timely payment of
Social Security
benefits
Temporary
exemption
for certain
borrowing
104-121
110 Stat. 875
03-29-96
Contract with
America
Advancement Act
Permanent
increase
105-33
111 Stat. 648
08-05-97
Omnibus budget
reconciliation
Permanent
increase
107-199
116 Stat. 734
06-28-02
Debt-limit increase
Permanent
increase
108-24
117 Stat. 710
05-27-03
Debt-limit increase
Permanent
increase
108-415
118 Stat. 2337
11-19-04
Debt-limit increase
Permanent
increase
Type of Act
Nature of
Adjustment
Sources: (1) Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Historical Tables, Table 7.3, Feb. 2005, pp. 121-124; and (2) Statutes-at-Large, various volumes increase
P.L. 103-66
(08-10-1993)
H.R. 2924
Regular legislative
procedures
Timely payment of
Temporary
Social Security benefits exemption for
certain borrowing
P.L. 104-103
(02-08-1996)
H.R. 3021
Regular legislative
procedures
Timely payment of
Temporary
Social Security benefits exemption for
certain borrowing
P.L. 104-115
(03-12-1996)
H.R. 3136
Regular legislative
procedures
Contract with America
Advancement Act
Permanent increase
P.L. 104-121
(03-29-1996)
H.R. 2015
Reconciliation
process
Omnibus budget
reconciliation
Permanent increase
P.L. 105-33
(08-05-1997)
Regular legislative
procedures
Debt-limit increase
Permanent increase
P.L. 107-199
(06-28-2002)
Gephardt rule
procedures
Debt-limit increase
Permanent increase
P.L. 108-24
(05-27-2003)
Regular legislative
procedures
Debt-limit increase
Permanent increase
P.L. 108-415
(11-19-2004)
H.J.Res. 47
Gephardt rule
procedures
Debt-limit increase
Permanent increase
P.L. 109-182
(03-20-2006)
H.J.Res. 43
Gephardt rule
procedures
Debt-limit increase
Permanent increase
P.L. 110-91
(09-29-2007)
H.R. 3221
Regular legislative
procedures
Housing and Economic Permanent increase
Recovery Act of 2008
P.L. 110-289
(07-30-2008)
H.R. 1424
Regular legislative
procedures
Emergency Economic
Stabilization Act of
2008
P.L. 110-343
(10-03-2008)
S. 2578
H.J.Res. 51
S. 2986
Permanent increase
Sources: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2009, Historical
Tables, Table 7.3, Feb. 2008, pp. 130-133; and the Legislative Information System (LIS), [http://www.congress.gov].