The DEFUND Act of 2025 aims to limit the portion of the U.S. national debt that can be held by foreign governments, entities, and individuals. It establishes a cap of one-quarter for the total debt held by foreign parties, and a 5% limit for debt held by any single foreign country and its citizens and entities. The President can waive these limits if they determine it's in the national interest.
Latest Action
Referred to the House Committee on Ways and Means.
AI Summary
Plain-English explanation of this bill
The DEFUND Act of 2025 aims to limit the portion of the U.S. national debt that can be held by foreign governments, entities, and individuals. It establishes a cap of one-quarter for the total debt held by foreign parties, and a 5% limit for debt held by any single foreign country and its citizens and entities. The President can waive these limits if they determine it's in the national interest.
Last updated: 12/29/2025
Official Summary
Congressional Research Service summary
<p><b>National Debt is National Security Act</b></p> <p>This bill establishes limits on the portion of the national debt that may be held by foreign governments, entities, and individuals. </p> <p>Specifically, the portion of the national debt that is cumulatively held by foreign governments, entities organized or incorporated under the laws of a foreign country, and citizens of foreign countries may not exceed one-fourth of the national debt. </p> <p>In addition, the portion of the national debt that is cumulatively held by the government of a single foreign country, entities organized or incorporated under the laws of the country, and citizens of the country may not exceed 5% of the national debt. </p> <p>The bill allows the President to waive these limits if the President determines and reports to Congress that an important national interest requires the waiver. </p>
Key Points
Main provisions of the bill
Limits the portion of U.S. national debt that can be held by foreign governments, entities, and individuals to 25% total and 5% per country
Allows the President to waive these limits if they determine it's in the national interest
Designed to reduce foreign ownership and control of U.S. debt
How This Impacts Americans
Potential effects on citizens and communities
If enacted, this bill would restrict foreign investment in U.S. government debt, potentially making it more difficult for the federal government to borrow money from overseas sources. This could impact interest rates, government spending, and economic relationships between the U.S. and its major foreign creditors like China.
Policy Areas
Primary Policy Area
Economics and Public Finance
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
1498, 119th Congress (2025). "DEFUND Act of 2025". Source: Voter's Right Platform. https://votersright.org/bills/118-hr-1498
