Overview

• Proposes constitutional amendment capping total federal debt (public and intragovernmental) at percentage of Gross Domestic Product
• Status: Introduced January 3, 2025, referred to House Judiciary Committee
• Constitutional amendments require 2/3 vote in both chambers plus ratification by 38 state legislatures

Who does this affect?

• Main groups: Congress (new voting requirements), President (budget compliance mandates), federal agencies
• Who benefits/loses: Depends on how Congress responds to debt caps—could force spending cuts or tax increases across all programs
• Teen impact score: 2/10 (minimal teen connection—sets government finance rules without direct impact on teen programs or services)

What This Bill Does

• Section 1: Caps total federal debt at 130% of GDP in first year after ratification, then reduces cap by 1% each year until reaching permanent 120% of GDP limit
• Section 2: Requires 3/5 vote (300+ votes) in both House and Senate via rollcall to exceed debt limit for specific reasons in any fiscal year
• Section 3: Mandates President submit annual budget proposal showing debt compliance for upcoming fiscal year plus next 5 years
• Section 4: Allows Congress to waive debt limits for defense spending during declared war or when majority of both chambers certify military conflict creates imminent national security threat
• Section 6: Defines GDP as sum of consumer spending, investment, government spending, and net exports as determined by Bureau of Economic Analysis
• Section 7: Amendment takes effect beginning with third fiscal year after ratification by 38 states
• Must be ratified within 7 years of congressional approval or amendment expires

Legislative Status

• Currently in House Judiciary Committee
• Constitutional amendments need 2/3 vote in House (290 votes) and Senate (67 votes), then ratification by 38 state legislatures
• Only 27 amendments have been ratified in U.S. history; last one took 203 years

In short

• Creates constitutional debt limit starting at 130% of economy size, dropping to 120% permanently
• Congress needs supermajority (60% of members) to borrow beyond the cap
• War or military threats allow temporary exemptions with congressional approval
• President must submit budgets showing how government stays under debt limit
• Takes effect three years after 38 states approve

Why should I care?

This bill changes fundamental rules about government borrowing and spending. If the debt cap forces spending reductions, it could affect everything from school funding to student loans to highway repairs. If it forces tax increases instead, family budgets feel the pressure. The 3/5 vote requirement makes it harder for Congress to respond to economic crises by borrowing money. But constitutional amendments almost never pass—just 27 in 236 years—and this one needs approval from 290 House members, 67 senators, and 38 state legislatures.