As part of an effort to assist Congress in addressing challenges related to delays in raising the debt limit, the Government Accountability Office has released its study on the effect of the 2013 debt limit impasse. Through interviews of budget and policy experts, along with an interactive web forum, the GAO identified three potential approaches to minimize disruptions to markets and the broader economy.
Option 1: Link action on the debt limit to the budget resolution
- This option would minimize potential market disruptions by shifting the timing of the debate so that it occurs before debt nears the limit
Option 2: Provide the administration with the authority to increase the debt limit, subject to a congressional motion of disapproval
- This option would reduce the likelihood of market disruption by changing the results of a lack of congressional action from a potential default to a debt limit increase, while preserving Congress’s ability to manage the trajectory of federal debt
Option 3: Delegate broad authority to the administration to borrow as necessary to fund enacted laws
- This option would remove the dangers that accompany the fear of a U.S. default, by ensuring the Treasury has the authority to borrow to fund previously authorized spending