[Congressional Record Volume 142, Number 13 (Wednesday, January 31, 1996)]
[House]
[Page H983]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   THE DANGERS OF THREATENING DEFAULT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan [Mr. Smith] is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I think it is very dangerous to 
keep threatening a default of this country. I think the Democrat 
Members would be well served to look at the real financial situations. 
No. 1, if Secretary Rubin or the President of the United States default 
on our debt, and that is, not pay principal, not pay interest, they 
both should be impeached. What we are talking about is 1\1/2\ percent 
of existing revenues coming into this Government to totally satisfy the 
interest and principal; so to play these political games, to scare the 
American people, to try to convince Wall Street that something 
disastrous is going to happen I think is a very dangerous, a very 
dangerous commentary, because it does have, what you say does have an 
effect on people in trying to understand and believe what is actually 
going to happen.
  We talked about a director of a company or a manager or a CEO of a 
company being fired. If there was a manager of a company that took the 
actions of Secretary Rubin last June and July, developing the plans on 
how he is going to come up with additional cash flow to meet those 
needs, and at the same time proclaim to the Nation that there was going 
to be a disastrous danger of default, interest rates would be going up 
across the country.
  Let us look at what Mr. Rubin just did the day before yesterday. He 
sent out a memo to the Veterans Administration, to Social Security, and 
what he said was if people call in and ask if they are going to get 
their payments, telling them that there is a problem, we might not have 
enough money to pay Social Security payments, to pay veterans' 
payments, to pay civil service retiree payments. What a tremendous 
disaster, to threaten people, to scare people, when it is absolutely 
untrue, uncalled for.
  What this administration has done so far is they have reached into 
the trust funds, they have reached into the Federal financing bank, 
they have reached into the exchange stabilization funds, to the tune of 
$20 billion for the Mexican bailout. Now they are reaching in again for 
another $3.5 billion, to say that they are going to have additional 
money to pay this out. They are saying they do not want to go any 
further, because they think they can blame everything on Republicans 
now.
  Mr. Speaker, I ask the ladies and gentlemen of America to take some 
time to study this budget, to study the reality of the consequences. 
Fifty percent of the spending of the United States is now in the hands 
of the President. Article 1, section 8 of the Constitution says that 
Congress has the control over spending, Congress has control over 
borrowing. Now the President has taken control over welfare spending. 
He has said, ``No, we are not going to cut that spending.'' Somehow, if 
we give a hang for our kids and our grandkids, and for the future 
economy of this country, we are going to have to somehow have a real, 
honest balanced budget.
  Mr. HOKE. Mr. Speaker, will the gentleman yield?
  Mr. SMITH of Michigan. I yield to the gentleman from Ohio.
  Mr. HOKE. Mr. Speaker, I thank the gentleman for yielding to me.
  Mr. Speaker, I did not have an opportunity to respond a little 
earlier to the gentleman, but I wanted to point out that in the Budget 
Reconciliation Act, in the balanced budget agreement that the President 
vetoed and that all of my colleagues on the other side of the aisle 
voted against, and that I did vote for, that did extend the debt 
ceiling, there was a very good reason for it; because, in fact, in that 
situation what we did is we balanced the budget of the Federal 
Government. We actually set the glide path so we could bring back 
fiscal responsibility and fiscal integrity and fiscal authenticity. But 
that is something that my colleague, the gentleman from Texas, refused 
to agree to and would not agree to, and did not agree to.
  Mr. SMITH of Michigan. Mr. Speaker, I think we should mention that 
the President has now vetoed two debt limit increases. There is not a 
Member on this floor that has ever voted for a clean debt limit 
increase. I pause, because is it not sad that they are doing so much 
political rhetoric, yet all of the debt ceiling increases that have 
been used over the years have been used over the years to put in the 
Kemp-Roth, the Gramm-Rudman, the tax increases?
  Mr. ROHRABACHER. Mr. Speaker, will the gentleman yield?
  Mr. SMITH of Michigan. I yield to the gentleman from California.
  Mr. ROHRABACHER. Mr. Speaker, I thank the gentleman.
  Mr. SCHUMER. Mr. Speaker, the gentleman has made some statements.
  Mr. ROHRABACHER. Excuse me, I think I have the floor.
  Mr. SMITH of Michigan. Mr. Speaker, I yielded to the gentleman from 
California.
  Mr. ROHRABACHER. I have asked for someone to yield to me on the floor 
during debate and they have not done it. I would like to express some 
thoughts about some of the thoughts expressed earlier when your side 
controlled the floor. Unfortunately, it looks like I will not have time 
to do that, after being interrupted.

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