EXCLUSIVE — Sen. Cynthia Lummis (R-WY) is introducing a new bill to give states and cities the unusual option of sending unused federal dollars back to Washington, not for more programs, but to help pay down the national debt.

Lummis teamed up with Sen. Rick Scott (R-FL) to introduce the Pay Down the Debt Act, which would allow states and local governments to return unused grant dollars to the federal government where the funds will be “deposited in the general fund of the Treasury for the sole purpose of deficit reduction,” according to a copy of the bill provided to the Washington Examiner.

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Lummis introduced the bill in May 2021, but it did not move forward, so she’s reintroducing it as federal borrowing accelerates and deficit spending grows.

“Our national debt has ballooned from $28 trillion to nearly $37 trillion,” Lummis said in a statement. “This explosive growth is unacceptable, fiscally irresponsible, and fundamentally contrary to American values.”

Lummis continued, “Our state and local governments currently lack any mechanism to meaningfully address the debt crisis. This bill would empower them to return surplus or unnecessary federal funds they received back to the Treasury, specifically for debt reduction.”

The new legislative push comes as Senate Republicans craft President Donald Trump’s “big, beautiful bill” to advance key parts of his tax agenda, which is estimated to add trillions of dollars to the nation’s deficits in the coming years. 

The Congressional Budget Office estimated that the House-passed bill would increase the national debt by $3.3 trillion over the next decade, once interest payments and broader economic effects are taken into account.

The Senate’s version, which is still being hammered out, could prove even more costly. Its tax provisions alone carry a price tag hundreds of billions of dollars higher, according to the Joint Committee on Taxation. Meanwhile, efforts to offset those costs through spending cuts have hit procedural roadblocks, with the Senate parliamentarian rejecting several proposed savings under budget reconciliation rules.

The national debt has become a far more pressing concern than it was eight years ago when Congress passed Trump’s 2017 tax cuts. With the total now exceeding $36.1 trillion, investors demand steeper returns to lend money to the government. The interest rate on a 10-year Treasury note has climbed to around 4.5%, a sharp increase from the 2.5% rate in place when the 2017 tax cuts were enacted.

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As Senate Republicans continue to hammer out their version of the deal, Lummis hopes to find ways to offset growing costs for the federal government.

“We must change course immediately to avoid financial catastrophe – every dollar returned makes a difference in this fight,” she said.