[Congressional Record Volume 157, Number 114 (Wednesday, July 27, 2011)]
[Senate]
[Pages S4936-S4937]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             THE DEBT LIMIT

  Mr. TOOMEY. Mr. President, I will address the issue of the pending 
debt limit.
  Although the President's most recent speech on this did not give me 
great cause for confidence, I still hope he will drop his insistence on 
the huge tax increase in return for making the meaningful spending cuts 
and reforms that we need. I hope, most of all, he will drop his 
opposition to putting our budget on a path to balance.
  That is the big item I think we need in this debate. I think we ought 
to be willing to raise the debt limit, as I am, if in return for that 
we would have a commitment of the President to put us on a path to a 
balanced budget, as President Clinton committed to and he achieved with 
a Republican Congress back in 1995. I hope we will reach an agreement 
that solves the underlying problem prior to August 2.
  I am here this afternoon because I think we all have to acknowledge 
that we are late in the process, and I think it is indisputable that 
there is at least a possibility that August 2 will arrive without 
having raised the debt ceiling, whatever our personal preferences might 
be about that.
  In my view, since that is a possibility, it is essential that the 
Federal Government have a plan for what we will do if those 
circumstances arise. Specifically, what is going to have to happen is 
the government will have to spend some period of time--probably a very 
brief time, but a period of time nevertheless--operating exclusively on 
the ongoing tax revenues that will be coming in without the ability to 
go out and borrow additional money. That means necessarily that 
somebody is going to make decisions about prioritizing payments, by 
some criteria that somebody will come up with.
  Rather than simply wait and stumble into this period and discover 
what somebody has come up with, I think we ought to lay out a plan. So 
that is what my recently introduced legislation is meant to do.
  Some of us have made this argument for a long time. We saw this day 
coming, and we have known that we would face a difficult time raising 
this debt ceiling. It has always been possible that we would not do it 
by August 2. I have been arguing that we ought to have this plan.
  Unfortunately, the administration has persisted in denying that it is 
even possible to prioritize. It is ridiculous. It is going to happen. 
They are predicting that we are going to default on our bonds if we go 
past August 2 without having raised the debt ceiling.
  In a letter to Congress, Treasury Secretary Geithner said:

       This would be an unprecedented event in American history. A 
     default would inflict catastrophic, far-reaching damage on 
     our Nation's economy.

  President Obama said this in May of this year:

       If investors around the world thought that the full faith 
     and credit of the United States

[[Page S4937]]

     was not being backed up, if they thought that we might renege 
     on our IOUs, it could unravel the entire financial system.

  These are scare tactics. These things need not happen. I am afraid 
they are meant to intimidate Members of Congress into voting for a debt 
limit increase without the underlying reforms and spending cuts that 
the President resists. I think its irresponsible to make these 
suggestions because it is entirely within the power of the 
administration to avoid a catastrophic default even if the debt limit 
is not raised.
  Now we have published reports that Treasury officials are making 
private phone calls to senior executives at big banks informing them 
that the Treasury will not allow a default--will choose not to default 
on our bonds. I think they should not default on our bonds, but it is 
all well and good to tell the big banks this. How about ordinary 
Americans who wonder: What about our savings, and what about Social 
Security payments?
  This is unacceptable. That is why we introduced a bill called 
Ensuring the Full Faith and Credit of the United States and Protecting 
America's Soldiers and Seniors Act. We have over 35 cosponsors.
  Our bill would instruct the Treasury Secretary that in the event, 
however unlikely, that the debt ceiling is not raised prior to August 
2, they make certain obligations and priorities so they will be paid in 
full, on time, and without delay. Those three priorities are: interest 
on our debt, so we will not default and plunge our country into 
economic chaos; No. 2, Social Security payments because millions of 
senior citizens, including my parents, depend on Social Security 
payments. They have earned that benefit by virtue of the payments they 
have made. We can and must honor that obligation. Next is payroll for 
Active-Duty military personnel because those risking their lives for us 
deserve this certainty.
  The fact is, there are far more than enough resources for the 
administration to make these payments. As this chart illustrates, the 
green bar reflects total minimum revenue expected to come in in August. 
The combination of interest on our debt, Active-Duty military pay, and 
Social Security benefits would add up to less than half of the revenue 
that we are going to take in in August alone. These are not my numbers. 
They come from the Bipartisan Policy Center. They illustrate clearly 
that we have the ability to pay these items and many others.
  Let me be very clear. I am not suggesting this is a desirable 
outcome. I am not suggesting this bill is the substitute for raising 
the debt ceiling.
  Mr. President, this chart illustrates that there clearly are more 
than enough financial resources that will be coming into the Treasury 
day in and day out in the form of ongoing tax revenue to easily be able 
to afford interest on our debt to avoid a default, Social Security 
payments to seniors so that they can be assured of the income they 
deserve, and Active-Duty military pay, with a great deal left over.
  These are not my numbers. They come independently verified by many 
organizations, including the Bipartisan Policy Center. This bill is not 
meant as a substitute for raising the debt limit. It is a mechanism for 
minimizing the disruption that might otherwise occur if the debt limit 
is not raised prior to August 2.
  It is my hope that this legislation never needs to be implemented. 
But I believe it would be irresponsible for us to go into this period 
without having planned for how we will handle it in the event this 
happens.
  I yield the floor.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. LEAHY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Cardin). Without objection, it is so 
ordered.

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