II
109th CONGRESS
1st Session
S. 355
IN THE SENATE OF THE UNITED STATES
February 10, 2005
Mr. Dorgan (for himself and Mrs. Clinton) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations
A BILL
To require Congress to impose limits on United States foreign debt.
Short title
This Act may be cited as the
Foreign Debt Ceiling Act of
2005
.
Foreign debt ceiling
Findings
Congress makes the following findings:
The United States has become the world's largest net debtor Nation, having run up massive trade deficits since the 1990s.
At the end of 2002, the net United States foreign debt stood at $2,553,000,000,000.
The United States foreign debt position worsened in 2003, when the United States had a record trade deficit of $489,000,000,000, equivalent to 4.4 percent of the United States GDP that year.
The large and growing United States foreign debt represents claims on United States assets by foreign nationals, which will eventually have to be repaid. If unchecked, the foreign debt could seriously undermine our children's future standard of living.
Moreover, the growing accumulation of foreign claims on United States assets, including over $1,200,000,000,000 in United States Treasury securities, makes the United States economy vulnerable to the whims of foreign investors.
Congress presently places a ceiling on United States public debt, but does not place a ceiling on United States foreign debt.
Just as Congress recognized the importance of placing a ceiling on the United States public debt, it is appropriate that Congress place a limit on the United States foreign debt.
Actions triggered by United States foreign debt
In general
Not later than the 15th day of the second month after the date of enactment of this Act, and every 3 months thereafter, the United States Trade Representative shall determine if—
the net United States foreign debt for the preceding 12-month period is more than 25 percent of United States GDP for the same period; or
the United States trade deficit for the preceding 12-month period is more than 5 percent of United States GDP for the same period.
Action by USTR
Whenever an affirmative determination is made under paragraph (1) (A) or (B), the United States Trade Representative shall—
within 15 days of the determination, convene an emergency meeting of the Trade Policy Review Group to develop a plan of action to reduce the United States trade deficit; and
within 45 days of the determination, present to Congress a report detailing the Trade Policy Review Group's trade deficit reduction plan.
Measurement of foreign debt
Statistical sources
For purposes of the calculations described in subsection (b)(1), the United States Trade Representative shall rely on the most recent period for which the following data, published by the Department of Commerce, is available:
In the case of United States foreign debt, the United States Trade Representative shall use the net international investment position of the United States, with direct investment positions determined at market value, as compiled by the Bureau of Economic Analysis.
In the case of the United States trade deficit, the United States Trade Representative shall use the goods and services trade deficit data compiled by the United States Census Bureau.
In the case of the United States GDP, the United States Trade Representative shall use the nominal gross domestic product data compiled by the Bureau of Economic Analysis.
Adjustment
The United States Trade Representative may adjust the data described in paragraph (1) to ensure that the determination is made for comparable time period.