[Congressional Record Volume 161, Number 18 (Tuesday, February 3, 2015)]
[House]
[Page H708]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         DEFAULT PREVENTION ACT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
California (Mr. McClintock) for 5 minutes.
  Mr. McCLINTOCK. Mr. Speaker, amidst all the controversies gripping 
Congress, certainly, we should all be able to agree that the full faith 
and credit of the United States should not hang in the balance every 
time there is a fiscal debate in Washington.
  This Nation now staggers under $18 trillion of debt, nearly $7.5 
trillion of it run up during this administration. The interest on that 
debt is one of the fastest growing components of the Federal budget.
  If there is ever any doubt of the security or reliability of that 
debt owed by this government, interest rates would quickly rise, and 
our precarious budget situation could rapidly spin out of control.
  Ernest Hemingway put it this way. He asked:

       How do you go bankrupt? Two ways. First gradually, then 
     suddenly.

  So it is with nations.
  The debt limit is how we regulate the Nation's debt. It is the 
national equivalent of a credit card limit. That limit has to be 
periodically adjusted. It is appropriate for Congress to take 
responsibility when it is raised. When it is raised, it is also 
appropriate for Congress to review and revise the policies that are 
driving that debt.
  The fundamental problem under both Democratic and Republican 
Congresses is that this process is fraught with controversy--the bigger 
the debt, the bigger the controversy; the bigger the controversy, the 
more credit markets are likely to be spooked into demanding higher 
interest payments to meet their greater risk. Given the size of our 
debt, that could produce an interest tidal wave that could sink our 
budget and our Nation along with it.
  I am, today, introducing the Default Prevention Act with 43 
cosponsors to guarantee that the sovereign debt of the United States 
Government will be paid in full and on time, under any circumstances, 
even total political gridlock.
  It simply provides that if the debt limit is reached, the Treasury 
Secretary may continue to borrow above that limit for the sole purpose 
of paying interest and principal that is due. It is an absolute 
guarantee that the debt of the United States will be honored.
  Most States have various laws to guarantee payment of their debts. 
Three years ago, in testimony to the Senate, Ben Bernanke praised these 
State provisions for maintaining confidence in their bonds.
  This act passed the House in the 113th Congress, but it was never 
taken up by the Senate. Now, we are approaching the expiration of the 
government's current borrowing authority. We will soon have serious 
discussions over the level of our debt and the additional measures 
necessary to bring that debt under control. We all hope these 
discussions will go smoothly, but we all know that sometimes they 
don't.
  The Default Prevention Act says loudly and clearly to the world that 
no matter how much we may differ and quarrel, the sovereign debt of 
this Nation is guaranteed, and their loans to this government are 
absolutely safe.
  Last session, the Democrats opposed this measure, charging that it is 
an excuse not to pay our other bills. Do they actually suggest that all 
these other States--that have guaranteed their sovereign debts for 
generations, some for centuries--have ever used these guarantees as an 
excuse not to pay their other bills?
  On the contrary--by providing clear and unambiguous mandates to 
protect their credit first, they actually support and maintain their 
ability to pay for all of their other obligations.
  The most outrageous claim the Democrats made was that this measure 
paid China first. What nonsense. More than half of our debt is held by 
Americans, often in American pension funds. This act actually protects 
Americans far more than Chinese or other foreign investors.
  Whether our loans come from China or Timbuktu, from Grandma's pension 
fund or Johnny's savings bond, without the Nation's credit, we cannot 
meet any of our other obligations.
  Principled disputes over how the debt limit is addressed are going to 
happen from time to time. Just a few years ago, then-Senator Barack 
Obama vigorously opposed an increase in the debt limit sought by the 
Bush administration.
  When these controversies erupt, as they inevitably do in a free 
society, it is imperative that credit markets are supremely confident 
that their loans to the United States are secure.
  Providing such a guarantee could prevent a future debt crisis and 
give Congress the calm it needs to negotiate the changes that must be 
made to bring our debt under control before Congress authorizes still 
more debt.
  I urge its speedy consideration.

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