“YES” on the Full Faith and Credit Act
In May, the House will vote on the Full Faith and Credit Act (H.R.807). The bill would require the Treasury Secretary to pay the principal and interest on America’s debt obligations and make Social Security payments before any other payments in the event the debt ceiling is reached. In effect, the bill begins the process of prioritizing federal spending.
America’s outstanding public debt is nearing $17 trillion, up from $10.6 trillion when President Obama took office. Sometime this year – perhaps in September or October – the President will demand lawmakers lift the nation’s statutory debt ceiling by trillions of dollars to avoid a “catastrophic default.” As the Heritage Foundation explains, there will be no such thing:
Both immediately and long after it reaches the debt limit, the government would have far more than enough revenue coming in that the Secretary of the Treasury could use to pay interest on the debt. Nor would preserving the current debt limit put at risk the full faith and credit of the United States government, as the President’s chief economic adviser has claimed. The government would continue to pay net interest as it comes due.
Unfortunately, many in the Obama administration refuse to publicly acknowledge their existing authority. Their position is political, designed to rattle financial markets and ultimately force conservatives into accepting another massive debt ceiling increase. The Full Faith and Credit Act removes this false political argument from the debate, forcing the Obama administration and others to focus on spending cuts and entitlement reform, as opposed to fear mongering.
The House Ways and Means Committee explains Standard and Poor’s and Moody’s indicate “it is unlikely that a failure to pay an obligation other than debt would prompt a review of the United States’ credit rating.” In other words, the bill would ensure America’s credit worthiness. Additionally, the bill would also require Treasury to provide weekly accounts to Congress, ensuring the Obama administration cannot game the system to the detriment of the American people of the economy.
The Full Faith and Credit Act is a solid first step in what many expect to be a long, hyperbolic fight over raising our nation’s debt ceiling.
Heritage Action supports H.R.807 and will include it as a key vote on our legislative scorecard.
Heritage Action Scorecard