Title: Debt Ceiling Alternative Act
Policy area: Economics and Public Finance

Summary:
Debt Ceiling Alternative Act
This bill establishes requirements and authorities for notifying Congress, issuing bonds, proposing rescissions, and selling assets if the debt limit will be reached.
The Department of the Treasury must notify Congress if it estimates that the U.S. debt will reach the statutory debt limit during a quarter. After Congress is notified, Treasury must issue bonds that (1) have an interest rate linked to the nominal gross domestic product of the United States, (2) may only be used to pay the principal and interest on obligations of the United States held by the public or the Social Security trust funds, and (3) are exempt from the debt limit.
Once Congress is notified that the debt limit will be reached, the President may issue a message to Congress containing a list of budget authority proposed to be rescinded. The list may only contain items related to unobligated balances of funds made available before the beginning of the fiscal year during which such notification is provided. Congress must consider the message using specified expedited legislative procedures.
If the debt limit notice has been provided to Congress, the President may also order the sale of specified mortgage-related assets owned or held by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Association (Freddie Mac), and the Federal Reserve. The proceeds from the sales must be deposited in the Treasury.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5083 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 5083

   To provide that, in the event that the Secretary of the Treasury 
   estimates that the debt ceiling will be reached, the Secretary is 
required to issue GDP-linked bonds to pay the principal and interest on 
    the public debt and the President is authorized to request the 
 rescission of certain unobligated balances and sell certain mortgage-
                related assets, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 14, 2019

 Mr. Schweikert (for himself, Mr. Norman, Mr. Meadows, and Mr. Gaetz) 
 introduced the following bill; which was referred to the Committee on 
    Ways and Means, and in addition to the Committees on Financial 
   Services, the Budget, and Rules, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To provide that, in the event that the Secretary of the Treasury 
   estimates that the debt ceiling will be reached, the Secretary is 
required to issue GDP-linked bonds to pay the principal and interest on 
    the public debt and the President is authorized to request the 
 rescission of certain unobligated balances and sell certain mortgage-
                related assets, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Debt Ceiling Alternative Act''.

SEC. 2. ESTIMATE THAT BORROWING WILL REACH THE STATUTORY DEBT LIMIT.

    If the Secretary of the Treasury makes an estimate of net 
marketable borrowing for a quarter that estimates that the debt of the 
United States, as defined in section 3101 of title 31, United States 
Code, will reach the statutory limit during such quarter, the Secretary 
shall immediately notify Congress of such estimate, and the Secretary 
of the Treasury shall issue bonds described under section 3 and the 
President may take the actions described under sections 4 and 5.

SEC. 3. ISSUANCE OF GDP-LINKED BONDS TO PAY THE PRINCIPAL AND INTEREST 
              ON THE PUBLIC DEBT.

    (a) In General.--Upon the issuance of a notification to Congress 
under section 2, the Secretary of the Treasury shall issue bonds--
            (1) with an interest rate linked to the nominal gross 
        domestic product of the United States; and
            (2) the proceeds from which may only be used to pay the 
        principal and interest on obligations of the United States held 
        by the public or the Old-Age and Survivors Insurance Trust Fund 
        and Disability Insurance Trust Fund.
    (b) Obligations Exempt From Public Debt Limit.--Obligations issued 
under subsection (a) shall not be taken into account in applying the 
limitation in section 3101(b) of title 31, United States Code, to the 
extent that such obligation would otherwise cause the limitation in 
section 3101(b) of title 31, United States Code, to be exceeded.
    (c) Report on Certain Actions.--
            (1) In general.--If the Secretary of the Treasury issues 
        bonds under subsection (a), the Secretary shall thereafter 
        submit a report each week, until all such bonds are redeemed, 
        providing an accounting relating to--
                    (A) the principal on mature obligations and 
                interest that is due or accrued of the United States; 
                and
                    (B) any bonds issued pursuant to subsection (a).
            (2) Submission.--The report required by paragraph (1) shall 
        be submitted to the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the Senate.

SEC. 4. RESCISSION OF UNOBLIGATED BALANCES.

    (a) Identification of Unobligated Balances.--Upon the issuance of a 
notification under section 2, the President may issue a message to 
Congress containing a list of budget authority proposed to be 
rescinded. Such list may only contain items related to unobligated 
balances of funds made available before the beginning of the fiscal 
year during which such notification is made.
    (b) Expedited Consideration of Rescissions.--A message issued 
pursuant to subsection (a) shall be deemed a special message for 
purposes of the expedited procedures described under section 1017 of 
the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 
688).

SEC. 5. SALE OF MORTGAGE-RELATED ASSETS.

    Upon the issuance of a notification to Congress under section 2, 
the President may order the sale of the following assets, with the 
proceeds from such sales deposited in the Treasury:
            (1) On-balance sheet non-performing mortgages of the 
        Federal National Mortgage Association.
            (2) Other mortgages owned or held by the Federal National 
        Mortgage Association.
            (3) Real estate owned properties of the Federal National 
        Mortgage Association.
            (4) On-balance sheet non-performing mortgages of the 
        Federal Home Loan Mortgage Corporation.
            (5) Other mortgages owned or held by the Federal Home Loan 
        Mortgage Corporation.
            (6) Real estate owned properties of the Federal Home Loan 
        Mortgage Corporation.
            (7) Mortgage-backed securities held by the Board of 
        Governors of the Federal Reserve System or any Federal reserve 
        bank.
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