This bill creates a new Debt Reduction Fund designed to pay down the national debt using revenue from federal oil and gas leases. Starting 100 days after the law takes effect, 25 percent of all revenue collected from onshore and offshore oil and gas lease sales on federal lands would go into this fund rather than the general Treasury. The money, which includes initial bids, royalties, rental payments, and fees collected over the life of each lease, would be used exclusively to reduce the principal of outstanding Treasury securities and other federal debt instruments. The Secretary of the Treasury would be required to apply all deposited funds toward debt reduction at the end of each fiscal quarter and submit quarterly reports to Congress detailing which securities were redeemed and how much the total federal debt was reduced.
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