With debt near $40T, GOP bills would tie debt hikes to spending cuts

By Brett Rowland
The Center Square

As the U.S. nears a mid-2027 debt-limit deadline with debt approaching $40 trillion, two Republican bills would bar Congress from raising the ceiling without matching any increased spending with spending cuts elsewhere.

The Dollar-for-Dollar Deficit Reduction Act, introduced separately by U.S. Senate Republican Whip John Barrasso of Wyoming and Rep. Greg Steube, R-Fla., would require any increase or suspension of the debt limit to be matched by equal or greater spending cuts over the current year and the following 10 years. It would be enforced through a congressional point of order. The National Taxpayers Union supports the measure.

"Congress cannot keep raising the credit limit on the American people without cutting up the credit card," Steube said in announcing the bill. "If Congress wants to raise the credit limit, Congress must cut spending by the same amount."

The national debt stands at $39.9 trillion, according to the Treasury Department, closing in on the $41.1 trillion ceiling that Congress raised by $5 trillion in last year's One Big Beautiful Bill Act, a tax-and-spending law.

Fitch Ratings projected that the government will hit that ceiling around mid-2027, with several months more before it exhausts the extraordinary measures that stave off default.

The Bipartisan Policy Center, which tracks the deadline, is trending toward the earlier end of that window. Shai Akabas, the group's vice president of economic policy, told The Center Square that weaker-than-expected tariff revenue and higher deficits are pulling the date forward, leaving "another six to nine months" of extraordinary measures once the ceiling is hit "before the government could no longer pay all of its bills in full and on time."

The bills would bar accounting methods that let past deficit deals count savings that never materialized. Net interest savings could not count toward the required cuts, and lawmakers could not shift spending outside the 10-year window to meet the target. The Congressional Budget Office would have to score any debt-limit bill and post the estimate publicly for 24 hours before a vote. Waiving the point of order would take 60 Senate votes.

All three major credit-rating agencies have downgraded U.S. debt – Standard & Poor's in 2011, Fitch in 2023 and Moody's in 2025 – each pointing to the nation's rising debt and Washington's failure to address it. S&P and Fitch specifically cited debt-ceiling standoffs. S&P warned more than a decade ago that "the statutory debt ceiling and the threat of default have become political bargaining chips."

Neither bill has drawn a Democratic cosponsor. The mechanism draws its force from the debt ceiling itself: because the point of order applies only to debt-limit legislation, the pressure to accept the required cuts builds against the deadline for avoiding a default. House Budget Committee Democrats did not respond to a request for comment Friday afternoon.

Both bills have been referred to committee, with no vote scheduled, and versions of the dollar-for-dollar concept have circulated for years without becoming law.

Fitch flagged the November midterms as the variable that will determine whether a renewed standoff, and the risk of default, takes shape before the deadline arrives.