Federal

National Debt is National Security Act

Source: Congress.gov · 729 words in original text

What This Bill Does

This bill creates rules to limit how much U.S. government debt (money the government borrows) can be held by foreign countries, foreign businesses and foreign citizens. The bill is titled the "National Debt is National Security Act."

Who It Affects

The Secretary of the Treasury (the person who manages U.S. money and finances), the Director of the Office of Management and Budget (the person who oversees government spending), the President, Congress, foreign governments, foreign companies and foreign citizens who own U.S. debt.

Key Provisions

- Foreign governments, foreign companies and foreign citizens combined cannot hold more than one-fourth of total U.S. national debt (Sec. 2(a)(1)) - Any single foreign country, including its government, companies and citizens combined, cannot hold more than 5 percent of total U.S. national debt (Sec. 2(a)(2)) - The Secretary of the Treasury working with the Office of Management and Budget must create written instructions for how to calculate and track foreign holdings of U.S. debt (Sec. 2(b)) - The President can ignore these limits if the President decides it is important for national security and notifies Congress with a detailed explanation by the date the President uses this power (Sec. 2(c)(1) and (c)(2))

What Changes

U.S. government would be required to track and enforce limits on how much debt foreign nations and foreign citizens can hold. The government could not allow foreign holders to exceed the stated percentages unless the President invokes the national security waiver.

Important Definitions

"National debt" means the face amount (the stated value) of money obligations the U.S. government issues and the face amount of obligations whose principal (the original amount borrowed) and interest are guaranteed by the U.S. Government. This does not include guaranteed obligations held by the Secretary of the Treasury (Sec. 2(d)).

Effective Date

Not specified in bill text

II 118TH CONGRESS 1ST SESSION S. 742 To establish limitations on the amount of debt issued by the United States which may be held by foreign governments, entities, and individuals. IN THE SENATE OF THE UNITED STATES MARCH 9, 2023 Ms. ERNST (for herself, Mr. BRAUN, Mr. CASSIDY, and Ms. LUMMIS) intro- duced the following bill; which was read twice and referred to the Com- mittee on Finance A BILL To establish limitations on the amount of debt issued by the United States which may be held by foreign govern- ments, entities, and individuals. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘National Debt is Na- 4 tional Security Act’’. 5 VerDate Sep 11 2014 01:11 Mar 18, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S742.IS S742 kjohnson on DSK79L0C42PROD with BILLS 2 •S 742 IS SEC. 2. LIMIT ON PUBLIC DEBT HELD BY FOREIGN GOV- 1 ERNMENTS, ENTITIES, AND INDIVIDUALS. 2 (a) IN GENERAL.—Subchapter I of chapter 31 of title 3 31, United States Code, is amended by inserting after sec- 4 tion 3113 the following: 5 ‘‘§ 3114. Limit on public debt held by foreign govern- 6 ments, entities, and individuals 7 ‘‘(a) IN GENERAL.— 8 ‘‘(1) CUMULATIVE LIMIT.—Notwithstanding 9 any other provision of this chapter, the amount of 10 the national debt which is cumulatively held by for- 11 eign governments, entities organized or incorporated 12 under the laws of a foreign county, and citizens of 13 foreign countries shall not exceed an amount equal 14 to one-fourth of the national debt. 15 ‘‘(2) COUNTRY-SPECIFIC LIMIT.—Notwith- 16 standing any other provision of this chapter, with re- 17 spect to any foreign country, the amount of the na- 18 tional debt which is cumulatively held by the govern- 19 ment of such country, entities organized or incor- 20 porated under the laws of such county, and citizens 21 of such country shall not exceed an amount equal to 22 5 percent of the national debt. 23 ‘‘(b) DETERMINATION.—The Secretary of the Treas- 24 ury, in coordination with the Director of the Office of 25 Management and Budget, shall issue guidance regarding 26 VerDate Sep 11 2014 01:11 Mar 18, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S742.IS S742 kjohnson on DSK79L0C42PROD with BILLS 3 •S 742 IS implementation of this section, including calculation of the 1 amount of the national debt held by foreign governments, 2 entities organized or incorporated under the laws of a for- 3 eign county, and citizens of foreign countries. 4 ‘‘(c) PRESIDENTIAL WAIVER.— 5 ‘‘(1) IN GENERAL.—The President may waive 6 the application of paragraph (1) or (2) of subsection 7 (a) if the President determines and, pursuant to 8 paragraph (2), so reports that the important na- 9 tional interest of the United States requires the ex- 10 ercise of such waiver authority. 11 ‘‘(2) CONGRESSIONAL NOTIFICATION.—Not 12 later than the date of the exercise of a waiver under 13 paragraph (1), the President shall notify the Com- 14 mittee on Ways and Means of the House of Rep- 15 resentatives and the Committee on Finance of the 16 Senate of the waiver or the intention to exercise the 17 waiver, together with a detailed justification thereof. 18 ‘‘(d) NATIONAL DEBT.—For purposes of this section, 19 the term ‘national debt’ means the face amount of obliga- 20 tions issued under this chapter and the face amount of 21 obligations whose principal and interest are guaranteed by 22 the United States Government (except guaranteed obliga- 23 tions held by the Secretary of the Treasury).’’. 24 VerDate Sep 11 2014 01:11 Mar 18, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S742.IS S742 kjohnson on DSK79L0C42PROD with BILLS 4 •S 742 IS (b) CLERICAL AMENDMENT.—The table of sections 1 of subchapter I of chapter 31 of title 31, United States 2 Code, is amended by inserting after the item relating to 3 section 3113 the following: 4 ‘‘3114. Limit on public debt held by foreign governments, entities, and individ- uals.’’. Æ VerDate Sep 11 2014 01:11 Mar 18, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S742.IS S742 kjohnson on DSK79L0C42PROD with BILLS

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