[Congressional Record Volume 161, Number 154 (Wednesday, October 21, 2015)]
[House]
[Pages H7053-H7060]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEFAULT PREVENTION ACT
Mr. RYAN of Wisconsin. Mr. Speaker, pursuant to House Resolution 480,
I call up the bill (H.R. 692) to ensure the payment of interest and
principal of the debt of the United States, and ask for its immediate
consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 480, the bill
is considered read.
The text of the bill is as follows:
H.R. 692
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Default Prevention Act''.
SEC. 2. PAYMENT OF PRINCIPAL AND INTEREST ON PUBLIC DEBT AND
SOCIAL SECURITY TRUST FUNDS.
(a) In General.--In the event that the debt of the United
States Government, as defined in section 3101 of title 31,
United States Code, reaches the statutory limit, the
Secretary of the Treasury shall, in addition to any other
authority provided by law, issue obligations under chapter 31
of title 31, United States Code, to pay with legal tender,
and solely for the purpose of paying, the principal and
interest on obligations of the United States described in
subsection (b) after the date of the enactment of this Act.
(b) Obligations Described.--For purposes of this
subsection, obligations described in this subsection are
obligations which are--
(1) held by the public, or
(2) held by the Old-Age and Survivors Insurance Trust Fund
and Disability Insurance Trust Fund.
(c) Prohibition on Compensation for Members of Congress.--
None of the obligations issued under subsection (a) may be
used to pay compensation for Members of Congress.
(d) Obligations Exempt From Public Debt Limit.--Obligations
issued under subsection (a) shall not be taken into account
in applying the limitation in section 3101(b) of title 31,
United States Code, to the extent that such obligation would
otherwise cause the limitation in section 3101(b) of title
31, United States Code, to be exceeded.
(e) Report on Certain Actions.--
(1) In general.--If, after the date of the enactment of
this Act, the Secretary of the Treasury exercises his
authority under subsection (a), the Secretary shall
thereafter submit a report each week the authority is in use
providing an accounting relating to--
(A) the principal on mature obligations and interest that
is due or accrued of the United States, and
[[Page H7054]]
(B) any obligations issued pursuant to subsection (a).
(2) Submission.--The report required by paragraph (1) shall
be submitted to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the
Senate.
The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. Ryan) and
the gentleman from Michigan (Mr. Levin) each will control 30 minutes.
The Chair recognizes the gentleman from Wisconsin.
General Leave
Mr. RYAN of Wisconsin. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on H.R. 692, the Default
Prevention Act, currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, if you want to guarantee that the United States will
never default, then you should vote for this bill. If you want to
protect working families from the consequences of default, then you
should vote for this bill. If you want to make sure that seniors get
every dime of their Social Security, then vote for this bill.
Mr. Speaker, this bill does not raise the debt limit, but it
eliminates the threat of default. The full faith and credit of our
country is too important to put at risk. What this bill says is very
simple. It says that we will never fail to pay our debts. That is just
it. That is all it does. It is just paying our debts.
We know the consequences of default. We know it would shake the
world's confidence in us. We know that it could freeze up credit across
this country. That is why with this bill, we are taking default off the
table. It is common sense.
I want to thank Mr. McClintock for developing this legislation, and I
ask my colleagues to support it.
Mr. Speaker, I would like to yield the remainder of my time to the
gentlewoman from Kansas (Ms. Jenkins) and ask unanimous consent that
she be able to control the time from here on.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. LEVIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, let me just say at the beginning what needs to be said
at the end. This doesn't take default off the table. This is an effort
to obscure the reality. It does not take default off in any meaningful
way.
Default by any other name is default, and essentially what this bill
does is to address part of the problem but leave the rest of it very
much outstanding and very much there. This bill plays with fire. This
bill essentially--essentially--attacks the credit of the United States
of America.
The Republicans are at it once again. In 2011, they played with it,
they played with fire, and America was burned. The stock market
plunged. The S&P downgraded for the first time in history the credit of
this country. It lowered private pension balances. It essentially
increased the cost of mortgages for people in this country. That wasn't
enough. That in 2013 the Republicans played with fire and shut down the
government. We lost 120,000 jobs. We slowed GDP growth, and there was
an increase of $70 million in terms of the cost of financing debt.
So what is this really all about? What it is about is paying China
and other foreign governments first and essentially putting at risk
millions of Americans. So I just want to refer to who is at risk here.
Who would be subject to default?
Payments and benefits to 1.4 million Active-Duty troops, their pay is
at risk; benefits to almost 4 million disabled veterans; payment for
health care for 5.9 million veterans; education assistance for over 1
million; and loan support for homes for over 500,000 or 600,000
veterans. And then payments to small businesses would be put at risk,
payments to physicians under Medicare, payments to 30 million-plus kids
in terms of their meals, and payments to hundreds of thousands of
grantees of NIH.
So, Mr. Speaker, that is really what this is all about. Nine percent
of the expenditures of this country are going to be safeguarded, mostly
for foreign investors, and 30 percent in terms of Social Security
payments. That means 60 percent would be at risk, 60 percent of the 80
to 100 million payments each month.
So, essentially, what the Republicans are doing is creating, here, a
camouflage. But the problem with it is that it is so transparent. It
might be as a purpose to try to find a few more votes on the Republican
side, but when the camouflage is so obvious, I don't think it will
work.
The administration has stated its position. That position is very
clear, and I want to read from this Statement of Administration Policy.
I quote the last paragraph:
The President will not tolerate political gamesmanship,
which caused the Nation's credit rating to be downgraded in
2011 and proved harmful to both the United States and the
global economy. For this reason, if the President is
presented with legislation that would result in the Congress'
choosing to default on our obligations and imperil the full
faith and credit of the United States, he would veto it.
So this bill cannot become law. So why do it? Why not simply face up
to the need to address the full faith and credit of the United States?
I think the answer is this isn't policy, this is a ploy, and ploys
should not be used putting at risk the full faith and credit of the
United States and payments at risk for millions and millions of
Americans. That is really what this is all about.
This is irresponsible. This is indefensible. The only possible reason
for passing a bill that can't go anywhere is maybe to pick up a few
votes here. That is irresponsible in terms of the full faith and credit
of this beloved country of ours.
So, Mr. Speaker, I strongly urge strong opposition to this. When this
came up once before, I think every Democrat voted ``no''--every
Democrat. So we are supposed to be kind of in a new era talking about
bipartisanship. We are supposed to be, once again, thinking maybe we
can act together. Instead, what we have here is a bill by Republicans
essentially acting alone. It is a serious mistake.
Mr. Speaker, I reserve the balance of my time.
Ms. JENKINS of Kansas. Mr. Speaker, at this time, I yield 5 minutes
to the gentleman from California (Mr. McClintock), the author of the
legislation.
Mr. McCLINTOCK. I thank the gentlewoman.
Mr. Speaker, this bill simply guarantees that the sovereign debt of
the United States will be paid in full and on time--period. How could
that possibly be controversial? Yet in today's political environment,
it is.
The sovereign debt of the United States is what makes it possible for
us to pay all of our other obligations in this era of chronic deficit
spending that we are now in. This bill provides an absolute guarantee
of that credit.
Although the Constitution explicitly commands that the public debt of
the United States is not to be questioned, it provides no practical
mechanism to achieve this aim. This bill provides that mechanism. It
says that, whenever we reach the debt limit, the Treasury Secretary can
continue to borrow to pay interest and principal on the debt.
It amazes me that many of our friends on the other side of the aisle
support loan guarantees to foreign corporations and to special interest
groups, but they are unwilling to guarantee the loans to our own
government.
Mr. Speaker, the national debt is now larger than the entire economy.
It has doubled in the last decade. The interest on that debt is the
fastest growing component of the Federal budget. It threatens to exceed
our entire defense budget in just 8 years.
If there is ever any doubt over the security and reliability of the
debt owed by this government, the rates we pay to service our debt
would quickly rise and sink our country in a tidal wave of red ink.
Now, this is not a substitute for raising the debt limit. We all
recognize that in this era of chronic deficit spending under this
administration that is going to have to happen. We have a
responsibility to raise the debt limit, but we also have a
responsibility
[[Page H7055]]
to review the policies that are driving that debt.
{time} 1500
The Default Prevention Act says loudly and clearly to the world that,
no matter how much we may differ and quarrel here in Washington, the
sovereign debt of this Nation is guaranteed and that their loans to it
are absolutely safe.
We hear the charge that this would pay debts owed to foreign
governments before paying our own troops. Actually, more than half of
our debt is held by Americans, often in American pension funds. China
holds just 7 percent. But whether our loans come from China or from
Charleston, without the Nation's credit, we cannot pay our troops or
meet all of our other obligations.
Opponents charge that this is an excuse not to pay our other debts.
Well, what nonsense. This maintains the credit that is necessary to pay
our other debts.
Most States guarantee that their sovereign debt will be secure and
they have done so for generations. Do our friends actually suggest that
any of these States has ever used these guarantees as an excuse not to
pay their other bills? On the contrary, by protecting their credit
first, they actually support and maintain their ability to pay for all
of their other obligations.
The President contends that this is tantamount to a family saying it
would make its house payment, but not its car payment. I sure hope he
is getting better economic advice than that.
But let's continue the analogy. If the family is living on its credit
cards, as we are as a Nation, it had better make the minimum payment on
its credit card first or it won't be able to pay all the rest of its
bills.
And when that family has to increase its credit limit because it is
not spending within its means, it had better have a serious
conversation about what is driving its debt and what to do about it.
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 would 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 as we authorize still more debt.
The voices in opposition to this bill are the same voices that have
cheered the most profligate spending and borrowing binge in the history
of this Nation. It is time that we managed our affairs responsibly, and
guaranteeing our debt is an important step in doing so.
Mr. LEVIN. Madam Speaker, I yield myself 30 seconds.
The gentleman says we are going to raise the debt limit. Raise it.
Get a bill here that raises it. And then this political game will be
totally unnecessary. Raise it. Where is the bill?
I yield 3 minutes to the gentleman from New York (Mr. Rangel).
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Madam Speaker, my colleagues, the last few days in New
York people have been asking me: Do you really think Paul Ryan is going
to become Speaker of the House? I said: No. They said: Why? Don't you
believe he is intelligent, smart, dedicated? I said: That is just the
problem. I can't find anyone that I know and like that is more
conservative than Paul Ryan. Paul Ryan, if he were to become Speaker,
would be saying to the Republicans: I cannot accept this responsibility
unless you respect the integrity of the United States of America. They
said: Well, Charlie, what does that mean? I said: Well, Paul Ryan
wouldn't allow us to go into default. Paul Ryan would support
increasing the debt ceiling. Paul Ryan would recognize that we need our
infrastructure, we need our jobs, we need education. They said: Well,
what is the difference with that? I said: If Paul Ryan were to get
these type of commitments from the Republican Party, Speaker Boehner
never would have left, McCarthy never would have left.
So what are we going through today? Well, Paul Ryan knows that this
is not going to become law. Why? Because it doesn't make any sense.
It is almost like if you were in a corporation--since we are using
analogies--and they say: We promise you you are not going to go
bankrupt. You say: Well, how are you going to do that, since the only
people that you have to pay are those you borrowed money from? Well,
what about the cost of manufacturers? What about the salaries of the
workers? What about the health benefits? What about the other things
that make America great? Well, we didn't say that we are going to
protect you for that. But just for the principal and the interest that
you have to pay, you protect it.
This doesn't make any sense at all. But since it is going to be
vetoed, this must mean something to those people that, when you say
government, they get angry, when you say Obama, they see red, when you
find cooperation with Democrats, they say that you are not faithful to
the Republic.
So I don't know who these people are. We don't see them. They don't
talk this way. But someone that can believe that just paying off debt,
foreign and domestic, and not taking care of our veterans, not taking
care of our military, not taking care of our health concern--if you
really think that these things are just going to be forgotten, these
are not the principles that Paul Ryan believes in.
So, if this passes, if it is vetoed, can't we try to believe that, if
you really want to have a Republican Speaker, take this garbage off the
table, say you are going to cooperate for our country? This is more
important than Republicans and Democrats.
We are talking about the prestige, the full faith and credit of the
United States of America. People don't ask whether you are Republican
or Democrat. They just want to know are you going to pay your debts.
I thank you for this opportunity.
And, Paul, if they don't want you as Speaker, we will keep you as our
chairman.
Ms. JENKINS of Kansas. Madam Speaker, at this time, I yield 2 minutes
to the gentleman from Indiana (Mr. Rokita).
Mr. ROKITA. Madam Speaker, I thank the gentlewoman.
I rise today in simple, but strong, support for H.R. 692, the Default
Prevention Act.
This commonsense bill makes clear that the United States and those
who vote on the floor of this Chamber prioritize our debt and our
Social Security payments over our reckless government and otherwise
irresponsible spending.
With this bill, we take the hysteria out of our spending debate and
codify the integrity of our Nation's full faith and credit. And I would
say, Madam Speaker, that those that appear to oppose this bill really
and truly at the end of the day need the hysteria that surrounds this
issue to not go away simply so political points around this issue can
continue to be made.
Now, here is a real scary point, not political at all. Today, as we
stand here, our national debt stands in excess of $18 trillion. Yet,
according to the Congressional Budget Office, government revenues
were $3.25 trillion for fiscal year 2015 alone.
With $3.25 trillion revenue coming in, ladies and gentlemen, we do
not have a revenue problem. But with $18 trillion in debt, we certainly
have a spending problem. We must get to the root of it, and this bill
is a responsible step forward.
It is a responsible step forward because it truly takes the politics
of this debt and this hysteria off the table so that we can see as
American people and as a Congress so that we can be exposed to the
problems so that we can face it and, ultimately, so that we can solve
it.
That is what we came to Washington to do. I think a little bit all of
us did. For me, it is the majority of why I came to Washington, so that
our tough decisions can be faced, met, resolved, and we can ultimately
reduce this debt so that our children and grandchildren in the here and
now and yet to come don't have to be the first and second generations
in American history that are left worse off.
Mr. LEVIN. Madam Speaker, it is now my pleasure to yield 3 minutes to
[[Page H7056]]
the gentleman from Maryland (Mr. Hoyer), our Whip.
Mr. HOYER. Madam Speaker, I thank the gentleman for yielding.
I have been here for some period of time, and I have heard a lot
about caucuses. But I would like to see us do what the gentleman from
Indiana says, although I disagree with him on his conclusion.
I would like to see the formation of a responsibility caucus, a
caucus that is honest with the American people, that doesn't pretend
that this debt limit vote is a real vote.
It is a real vote when you cut revenues by hundreds of billions of
dollars and don't pay for it. And if you think that that does not up
the debt and somehow pays for it, you haven't been around for the last
35 years watching.
The responsibility caucus would say to the American people: If we
bought it, we are going to pay for it. Whether it was Social Security,
Medicare, an aircraft carrier, roads and bridges, whatever it was, we
will pay for it.
But one of the first things our Republican friends did was they
negated pay-for, and they certainly wouldn't have it apply to tax cuts.
Almost every responsible economist I have talked with says there is no
way you can do this without effectively having default.
Because if you prioritize debt, by definition, what you are saying is
there are some debts we will not pay. As soon as you say that, you have
defaulted. You may not default to a bond owner, but you have defaulted
on an obligation of the most creditworthy nation on Earth, the United
States of America.
This is a game. It is an irresponsible game. It is a game unworthy of
responsible representatives. Of course we are going to pay our debts.
We are America. When we say of course we are going to pay our debts, it
means that we will pay our debts.
In order to do that, you need to up the debt limit. If you don't want
the debt limit to go higher, stop buying things or pay for things or do
both.
I urge my colleagues to reject this irresponsible charade that is a
pretense of fiscal responsibility, not a reality. This is not worthy of
this Congress or the American people. It is clear that this House has
been a deeply divided House and a dysfunctional House for a number of
months now, indeed, for a number of years.
I understand that there are some people who demand legislation like
this that won't go anywhere and really won't do anything, and it will
put the credit of the United States at further risk. Let us reject this
charade.
Ms. JENKINS of Kansas. Madam Speaker, I yield myself such time as I
may consume.
I come today to the House as a supporter of the Default Prevention
Act. Right now our Nation stands at over $18 trillion in debt, a number
simply too large to comprehend.
As the House, we have an obligation to the American people to rein in
out-of-control Federal spending and put our economy on a sustainable
path forward.
However, while House Republicans will continue to act to reduce our
national debt and restore fiscal responsibility to the Federal
Government, we cannot put the full faith and credit of the United
States Government at risk.
The Default Prevention Act ensures that we will continue to pay our
existing debt obligations providing the economic security and certainty
that our economy needs.
This legislation does not allow for an increase in the debt limit. It
simply allows us to satisfy our existing debt obligations and avoid
default, even if we reach the debt ceiling.
This bill also protects Social Security beneficiaries and Americans
with disabilities by ensuring that their benefits will continue to be
paid on time. Hardworking Americans deserve to have their benefits
protected, and this bill does just that. This legislation is a
commonsense measure that protects Americans' credit and integrity.
I urge all Members of the House to support it.
I reserve the balance of my time.
Mr. LEVIN. Madam Speaker, I yield 2 minutes to the gentleman from
California (Mr. Becerra), our caucus chair.
Mr. BECERRA. Madam Speaker, I thank the gentleman from Michigan for
yielding.
1.4 million troops, 4 million disabled veterans, more than 30 million
children who participate on a daily basis in school lunch programs, and
small businesses all over the country are some of the Americans who
will pay the price if Republicans refuse to authorize our government to
pay all its bills.
{time} 1515
There are only 8 legislative days left for Congress to avoid
defaulting on paying America's financial bills. Yet, our House
Republican colleagues show no signs of putting serious business first
and trying to work with their Democratic colleagues to pay our Nation's
bills on time and in full. This bill isn't a solution. It is a sham.
First, it instructs our government to pay foreign creditors ahead of
paying our troops or paying our veterans, who have honorably served our
country and have earned their benefits.
Second, our Republican colleagues propose under this bill to borrow
new money to pay for previously borrowed money and to say that the
previously borrowed money won't count on the books. Borrowing money off
the books to cover debt sounds a lot like a Ponzi scheme.
This is simply default by another name, bringing our economy closer
to the brink. Maybe some people in this Chamber have forgotten 2011.
When the Republicans brought us to the brink of default in 2011, the
stock market plunged and the S&P downgraded our credit rating for the
first time in our Nation's history.
In 2013, our Republican colleagues proposed default threats, and the
government shutdown that followed cost us 120,000 jobs and $24 billion
in slow GDP growth just as the economy was taking hold.
The Secretary of the Treasury, Secretary Lew, said in a letter last
week: ``There is no way to predict the irreparable damage that default
would have on global financial markets and the American people.''
Madam Speaker, you wouldn't constantly run your small business on the
edge of default. So why would Republicans try to run the largest
economy in the world this way?
We need to move forward. We have 8 days. Let us defeat this bill and
get our real work done.
Ms. JENKINS of Kansas. Madam Speaker, I yield 3 minutes to the
gentleman from South Carolina (Mr. Sanford).
Mr. SANFORD. I thank the gentlewoman.
Madam Speaker, my colleague from Maryland made the comment just a
moment ago of the ``responsibility caucus,'' that he would like to see
more of that.
What I would submit to everybody in this Chamber is that, ultimately,
what my colleague from California's bill is all about is, indeed, just
that because, if you think about it, we really are living in an age of
default.
Laurence Kotlikoff, from Boston University, has said that, in a thing
called generational accounting, the imputed cost of governing--the
imputed cost for a child born in America today in terms of future costs
all in--is about 80 percent.
Eighty percent is not all that far from a thing called slavery if you
have to be indentured to the Federal Government for the preponderance
of your life and your life's work. What this is ultimately about is
defusing that bomb.
Erskine Bowles was the former Chief of Staff to President Clinton. He
ran a commission that looked at the way our Federal Government spent
money. He said that what we have before us is the most predictable
financial crisis in the history of man and that it is but 10 years
off--roughly, 10 years off.
So, as we have a legitimate debate--and we will have a legitimate
debate between Republicans and Democrats and Independents and all of us
as Americans in where we go next--what this does is defuse that bomb of
a train wreck with regard to international and national credit markets
as we have that debate, and that is a very good thing.
This bill is about drawing a line as we have deadlines that come and
go with this debate. It is about a tug of war that is taking place, and
it is about saying let's step back and not risk credit markets and what
might happen next on that front.
[[Page H7057]]
Secondly, it is about simple priorities. In a family's budget, they
differentiate between the mortgage budget and the movie budget. Not all
government expenditure is equal.
There is a whole host of programs in the Federal Government that make
a lot of sense and some, frankly, that don't, some that add a lot of
value and some that add a little bit of value. For us to say, ``I will
tell you what. As we go through those deliberations, let's back up and
protect the financial creditworthiness of the United States
Government,'' it is, ultimately, a real step of responsibility.
I commend my colleague from California for offering this bill. I
thank him for his work to defuse a ticking time bomb in the debate that
will take place--a ticking time bomb that will go on, nonetheless, with
regard to what happens next with regard to the national debt.
Mr. LEVIN. Madam Speaker, I yield 2 minutes to the gentleman from
California (Mr. Thompson), another distinguished member of our
committee.
Mr. THOMPSON of California. I thank the gentleman for yielding.
Madam Speaker, here we go again. We are only weeks from defaulting on
our debt, and this bill does nothing to deal with that. The bill before
us today is, essentially, a plan for defaulting on our obligations.
As my friend said, the Republican gentleman from Louisiana, all this
does is prioritize our debt. If you are prioritizing your debt, by
definition, you are defaulting. You are not paying your bills.
This would prioritize our repayment, putting our veterans, small
businesses, and our first responders behind foreign governments in
regard to receiving the payment that is due to them.
We have to pay our bills. We cannot go down this road again. We have
seen this movie before, and it is not going to change. The last time we
came close to defaulting on our debt, the results were terrible. In 1
month, job growth dropped by more than 130,000 jobs. The S&P 500 tanked
by nearly 20 percent, and our credit rating was downgraded for the
first time in history.
No one knows for sure what the full extent of the damage to the
economy would be if we were to default on our debt. But, as Chairman
Ryan said earlier, we know that it would ``freeze up our economy''--
higher interest rates for mortgages on auto loans, student loans, and
credit cards; higher interest rates and less access to business loans
needed to finance payrolls, building inventories, or to invest in
equipment and construction; families' retirement savings in 401(k)'s
dropping as the stock market tanks; almost 4 million veterans not
receiving disability benefits; and doctors, medical providers, and
hospitals not getting their pay.
The debt limit is not something to play around with. We simply need
to pay our bills. Vote a resounding ``no'' on this bill, and let's pay
our bills.
Ms. JENKINS of Kansas. Madam Speaker, I yield 2 minutes to the
gentleman from Louisiana (Mr. Scalise), our whip.
Mr. SCALISE. I thank the gentlewoman from Kansas for yielding.
I want to thank my friend from California (Mr. McClintock) for
bringing this bill forward.
Madam Speaker, the Default Prevention Act takes off the table the
ability for any President to use the debt ceiling as an opportunity to
threaten default on the credit of the United States of America.
If you think about this, we are talking about whether or not the
United States is going to pay its bills. This should be something that
the President--any President--should understand as a basic
responsibility of his duty in office whether or not Congress can come
to an agreement with the President on the debt ceiling, which, by the
way, should be something the Speaker, the majority leader, and the
President are directly engaged in.
The fact that the President walked away from talks on negotiations on
the debt ceiling tells you that he is not taking this in the serious
way that he should. In fact, it also proves that the President wants to
use the debt ceiling to threaten the default of the United States. That
is irresponsible of any President. No President should have the option
of defaulting or of even threatening default, and this bill takes
default off the table as an option.
Now, why would the President be opposed to that?
I think it answers itself, Madam Speaker, because the President wants
to threaten default and have that as a political weapon to try to scare
the markets and to try to scare our seniors, who, by the way, are the
largest holders of debt. Seniors shouldn't have to worry about whether
or not that debt would be paid. Any creditor shouldn't be worried.
If the United States is going to borrow money, we should first focus
on getting to a balanced budget, which this President is opposed to.
Once we get to a balanced budget, we should also be focused on making
sure we are paying the debts that were incurred.
The fact that the President wants to threaten default as an option
shouldn't be available. This bill takes default off the table, and it
makes the focus really clear that the United States is going to live
within its means, uphold its obligations, and then go and focus on
attacking the real root problems that got us into this debt in the
first place.
I urge all of my colleagues to vote for this piece of legislation.
Let's send it over to the Senate, where they should pass it on to the
President.
Mr. LEVIN. Madam Speaker, I yield to the gentlewoman from Texas (Ms.
Jackson Lee) for a unanimous consent request.
(Ms. JACKSON LEE asked and was given permission to revise and extend
her remarks.)
Ms. JACKSON LEE. I thank the ranking member.
Madam Speaker, I rise to oppose H.R. 692, for we should pay our
debts. This bill is called the Pay China First Act.
Madam Speaker, I rise in strong opposition to speak on H.R. 692, the
so-called 'Default Prevention Act of 2015,'' which would result in the
Congress refusing to pay the financial obligations it has already
incurred.
This bill, which ought to be called the ``Pay China First Act,'' is
virtually-identical to the one House Republicans brought to the floor
in May 2013, which House Democrats unanimously opposed and which wasted
time and taxpayer money on its consideration before pushing the nation
to the brink of default just a few months later.
American families do not get to choose which bills to pay and which
ones to ignore; neither can the United States Congress without putting
the nation into default for the first time in its history.
In 1789, Alexander Hamilton, the nation's first and greatest Treasury
Secretary, understood that the path to American prosperity and
greatness lay in its creditworthiness which provided the affordable
access to capital needed to fund internal improvements and economic
growth.
The nation's creditworthiness was one of its most important national
assets and according to Hamilton: ``the proper funding of the present
debt, will render it a national blessing.''
But to maintain this blessing, or to ``render public credit
immortal,'' Hamilton understood that it was necessary that: ``the
creation of debt should always be accompanied with the means of
extinguishment.''
In other words, to retain and enjoy the prosperity that flows from
good credit, it is necessary for a nation to pay its bills.
H.R. 692 threatens the full faith and credit of the United States,
costs American jobs, hurt businesses of all sizes, and does irreparable
damage to the economy.
It is important to note that under the economic stewardship of the
Obama Administration, the Dow Jones Industrial Average closed above
17,000 for the first time ever, and unemployment has fallen to 5.1
percent, the lowest since the Clinton Administration.
Madam Speaker, obligations not guaranteed by H.R. 692, and therefore
in danger of not being paid on a daily basis, include pay for active-
duty military, veterans benefits, Medicare and Medicaid payments, and
payments to small businesses.
In short, H.R. 692 is simply default by another name.
Americans want a clean debt limit increase, which Congress has been
done numerous times and was the normal process until 2011 when the
House Republicans hijacked the process in a futile and quixotic effort
to repeal the Affordable Care Act.
H.R. 692 reflects a House Republican governing philosophy that puts
ideology over progress and partisan showmanship over common-sense
legislating.
Madam Speaker, we cannot continue to hold our nation hostage,
punishing the recipients of Social Security, Medicaid, and Medicare who
depend upon their benefits for economic survival.
That is why I support a long-term increase in the debt limit that
would provide economic stability to consumers, businesses, and
financial organizations and certainty to capital markets.
[[Page H7058]]
In contrast, the bill before us, H.R. 692, is merely a short-term
measure with unnecessary complications, needlessly perpetuating
uncertainty in the nation's fiscal system, and favors the Chinese
government over Americans.
My colleagues want to buy time so that they can figure out how to
squeeze the American taxpayer even more by devising bone-crunching cuts
and slashes to entitlement programs as opposed to sitting down and
working with Democrats to come up with reasonable budget reforms which
do not hurt seniors or the , disadvantaged.
Madam Speaker, Social Security is currently the only source of income
for nearly two-thirds of older American households receiving benefits,
and roughly one-third of those households depend on Social Security for
nearly all of their income.
Half of those 65 and older have annual incomes below $18,500, and
many older Americans have experienced recent and significant losses in
retirement savings, pensions, and home values.
Today, every dollar of the average Social Security retirement benefit
of about $14,800 is absolutely critical to the typical beneficiary.
Contrary to some claims, Social Security is not the cause of our
nation's deficit problem.
Not only does the program operate independently, but it is prohibited
from borrowing.
Social Security must pay all benefits from its own trust fund.
If there are insufficient funds to pay out full benefits, benefits
are automatically reduced to the level supported by the program's own
revenues.
Instead of short-term management of self-inflicted fiscal crises, it
is incumbent upon us on both sides of the aisle to find the common
ground needed to put the nation on a sounder fiscal path.
If President Obama has made clear that he remains willing to work
with both parties in Congress to budget responsibly and to achieve
additional deficit reduction consistent with the principles of balance,
shared growth, and shared opportunity.
But, as of today Madam Speaker, Congress has only two options--raise
the debt ceiling to allow the Treasury to pay the nation's bills, or
refuse to do so and have the nation default for the first time in
history.
I urge my colleagues to join me in voting against H.R. 692.
Mr. LEVIN. Madam Speaker, I yield 2 minutes to the gentleman from
Oregon (Mr. Blumenauer), another very distinguished member of our
committee.
Mr. BLUMENAUER. Thank you.
Madam Speaker, I am listening to my friend from Louisiana rewrite
history.
It is not the President who is threatening to default on the national
debt. It is the Republican Congress that is refusing to do what was
granted to every President in the past--Republican or Democrat--which
is to deal with raising the debt ceiling, which is, after all, money we
have already spent, money that they approved.
They have been in charge for the last 5 years. The notion that we can
somehow distinguish the semantics of this proposal, distinguishing
between sovereign debt and the rest of the 80 million transactions that
the Treasury makes every day, is lunacy.
If you disagree with our protections to seniors, veterans, the
military, Medicare, Medicaid, the FBI, food safety, cut them, but you
don't. You nibble away at them. You have never offered a balanced
budget when you have been in charge. We had balanced budgets when
President Clinton was President. Thank you very much. Unless you assure
everyone, nobody is protected.
As for the notion somehow that the President walked away from the
negotiations with Simpson-Bowles, where was Paul Ryan? I like Paul
Ryan. Paul Ryan refused to embrace Simpson-Bowles' proposals. They
cannot pass their vision. They want to blame the President and the
American people.
I would respectfully suggest that we ought to reject this fig leaf
and get down to business: raise the debt ceiling as we have done
repeatedly in the past for Presidents, whether they are Republicans or
Democrats, get past the rhetoric, and then deal with structural issues
going forward.
Let's rebuild and renew America. Let's raise the gas tax so we can
deal with our crumbling infrastructure, something that Ronald Reagan
did in 1982, when we faced a deficit in the highway trust fund then.
The SPEAKER pro tempore (Ms. Ros-Lehtinen). The time of the gentleman
has expired.
Mr. LEVIN. I yield the gentleman an additional 30 seconds.
Mr. BLUMENAUER. There are simple, commonsense solutions, by the way,
that are supported by the U.S. Chamber and the AFL-CIO, truckers and
AAA, business, government, to be able to get the country moving again,
to repair crumbling infrastructure, and not add to the deficit. One
simple, little step--something we could do--not deal with goofy
legislation like is offered today.
Ms. JENKINS of Kansas. Madam Speaker, I yield such time as he may
consume to the gentleman from California (Mr. McClintock).
Mr. McCLINTOCK. Madam Speaker, we are asked: Why don't you just raise
the debt limit?
Let me again make this very clear.
As long as we spend more than we take in, we have a responsibility to
raise the debt limit. Republicans acknowledge that responsibility.
Democrats acknowledge that responsibility.
Yet, with that responsibility comes a concomitant duty to review the
policies that are driving that debt. The Republicans acknowledge this
responsibility. The Democrats do not. That is the fine point of the
matter.
That is a policy debate, and it is controversial, but that
controversy should not roil credit markets and threaten to increase the
cost of our borrowing.
Given the size of the debt that we are carrying--and this
administration has nearly doubled it by its policies--even a small
increase in interest rates could mean a catastrophic increase in
interest payments, and those increased interest payments in the tens--
possibly, hundreds--of billions of dollars would come at the cost of
every other program that the Democrats cherish.
We keep hearing about the S&P downgrading our credit rating in 2011.
Let me remind them that, for months prior to that downgrade, the S&P
demanded that we reduce our 10-year projected deficit by at least $4
trillion or they would downgrade our sovereign debt. We ultimately only
reduced it by $1.2 trillion because of the voices that we now hear
raised against this bill, and the S&P followed through on that threat.
{time} 1530
My Democratic colleagues are right, a threat not to pay interest and
principal on our debt is the biggest threat to our credit. That is
precisely the threat this bill takes off the table by guaranteeing our
sovereign debt.
My friends are correct that failure to pay our other bills would be a
very bad thing, and it is much to be avoided. There is no dispute in
that.
As long as the debt limit has to be increased, there is going to be
controversy; and that controversy, whether during Republican or
Democratic Congresses or Republican or Democratic administrations, must
not be allowed to provoke an increase in borrowing costs because we
have frightened credit markets.
This is not a threat to default. It is a promise not to default on
the sovereign debt that we use to fund everything else that we do. My
friends on the left make no distinction between sovereign debt and our
other obligations. That may explain some of the reasons we are in the
mess we are in.
The fact is our sovereign debt is what makes it possible to pay for
our other obligations as long as we continue to spend beyond our means.
This measure guarantees the sovereign debt.
The policies advocated by the opponents of this motion are precisely
the policies that have caused our country to wander now through 7 years
down a dark road of debt, doubt, despair, and economic malaise.
It is time for a new morning in America, and that begins with
guaranteeing the sovereign debt of this Nation. I ask for your support
for this bill.
Mr. LEVIN. Could I ask the Speaker how much time is remaining on both
sides?
The SPEAKER pro tempore. The gentleman from Michigan has 10 minutes
remaining, and the gentlewoman from Kansas has 13\1/2\ minutes
remaining.
Mr. LEVIN. Madam Speaker, I yield 2 minutes to the gentleman from
Wisconsin (Mr. Kind), another distinguished member of our committee.
Mr. KIND. Madam Speaker, this unquestionably is one of the most
dangerous bills that we will be considering in this session of Congress
because this gives this body permission, for the very first time in our
Nation's history, to default on our financial obligations.
[[Page H7059]]
They claim that they are splitting the baby here by paying
bondholders only. One of the largest bondholders we have, of course, is
China, so this is a pay China first bill.
I have a feeling that the financial markets, the investors, and the
credit rating agencies will view this for what it is however: a default
is a default is a default.
A great nation like the United States of America should pay our
bills. We should pay our bills.
Now, no one can stand here or sit here today with complete certainty
and tell us what the market reaction would be if we start defaulting on
any financial obligations we have as a nation, and that is really the
point. Why would we even take that chance? Why would we take a chance
of a downgrade to our credit, of an increase in interest rates which
would impact everyone, from small businesses to families to farmers? It
would drive up borrowing costs, which would act as a brake on economic
activity and the job growth we have right now because we have never
done this before. That is the danger that this legislation sets up.
If my friends on the other side are so concerned about debt and
overspending, then perhaps they ought not have supported legislation
this year alone--bills that they have passed--that would increase our
national debt by $1.5 trillion over the next 10 years because you
refused to pay for the tax cuts or the spending increases that were in
that legislation through offsets in the budget. That may come as news
or surprise to the other side, but the Congressional Budget Office
score is $1.5 trillion of new debt over 10 years based on legislation
you supported: repealing SGR, $141 billion; permanent expensing, $380
billion; get rid of the estate tax, another $180 billion, and others.
It adds up to 1.5.
So if there is so much concern about excess spending and debt and
what it is doing to our economy, then maybe we ought to look at
ourselves first and the action that is being taken on this House floor.
We should not go down this path. We should stop creating the
uncertainty and dysfunction coming out of Washington and give the
economy a chance to recover.
I encourage my colleagues to reject this legislation.
Ms. JENKINS of Kansas. Madam Speaker, I reserve the balance of my
time.
Mr. LEVIN. Madam Speaker, I yield 2 minutes to the gentleman from New
York (Mr. Crowley), vice chair of our Caucus.
Mr. CROWLEY. Madam Speaker, I rise in strong opposition to the Pay
China First Act. We should call it, in my opinion, Put America Last Act
because that is exactly what this does. This bill will codify into law
a new low. It will ensure U.S. taxpayers are forced to pay China and
other regimes as well as foreign banks first. That means we will pay
China before we pay veterans, before we pay for Medicare to cover our
seniors, and before we pay our enlisted troops bravely serving
overseas. It means we are going to pay these guys before we pay these
guys. We are going to pay these guys before we pay these guys.
Even Chairman Ryan, in a memo to House Republican colleagues,
acknowledges that, in fact, China and other foreign debt holders will
be paid before Medicare, before our elderly receive their checks, and
before our troops receive their salaries.
This whole bill is a sign of misplaced priorities. There are
countless issues that Americans have called on us to address that we
need to tackle to ensure this country remains healthy and strong, yet
this is a bill the Republicans have chosen to bring to the floor. This
is a bill that you have chosen to bring to the floor.
At least now we know. We know this Congress is not serious about
paying our Nation's bills because, under this bill, we resort to having
the U.S. file, in essence, a bankruptcy. Filing for bankruptcy and
walking away from debt obligations may work for Donald Trump, but it
doesn't work for middle class Americans. Average Americans who work
hard to pay their bills and live up to their financial obligations--and
that includes American veterans and seniors--the Republicans would have
waiting in line for their VA benefits behind Chinese bankers.
I cannot support a measure that puts China above our veterans, above
our seniors, and above our servicemembers.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. LEVIN. I yield an additional 1 minute to the gentleman from New
York.
Mr. CROWLEY. Madam Speaker, if you ask the American people, ``Who
should be paid first, these guys or these guys?'' I suggest they would
agree with us. These guys should get paid first.
Oppose this Pay China First Act, and let's keep America first.
Let me also add this, Madam Speaker.
Have you ever heard of dine and ditch? This is the biggest dine and
ditch I have ever heard of. When I was a kid, some of my friends wanted
to go to restaurants, eat as much as they could, and then run out
before they paid their bill, and I would never let them do that. I felt
it was immoral. That is exactly what we are suggesting we do today.
Who got stuck paying for that bill? The waitress. Who is the waitress
in this case? The American people. The American people, they get stuck
when you dine and ditch on them. Even suggesting for a moment that we
may not pay our debt and that we may default sends the wrong message to
America. It sends the wrong message to the world.
Defeat this measure.
Ms. JENKINS of Kansas. Madam Speaker, I reserve the balance of my
time.
Mr. LEVIN. Madam Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Danny K. Davis), another very distinguished member of our
committee.
Mr. DANNY K. DAVIS of Illinois. Madam Speaker, I rise in strong
opposition to the Pay China First Act. I am truly shocked that the
Republican leadership is advancing a bill that approves America
defaulting on its debt.
This is a dangerous action that jeopardizes the full faith and credit
of our Nation. It also jeopardizes the well-being of millions of our
most vulnerable citizens.
I cannot support a bill that would tell my constituents that repaying
our debt to foreign countries is more important than paying their
salaries for military service or paying their disability benefits or
providing them student loans.
How can I tell small businesses in Illinois that repaying our debt to
a foreign government is more important than paying them for providing
goods and services to our government? How can I tell Illinois doctors
and hospitals that we can pay China for lending us money, but we cannot
pay them for taking care of our elderly?
The Council of Economic Advisers estimated that the 2013 debt limit
standoff and shutdown cost us 120,000 jobs, and the GAO estimated that
it resulted in $70 million in increased borrowing cost on securities
issued during the last crisis.
The 2013 debt limit fiasco already damaged our economic recovery, yet
the Republican leadership insists yet again on a path to harm our
national economy and well-being simply for political posturing.
I urge my colleagues to oppose this shameful bill that says that debt
to foreign countries is more important than our citizens.
We should protect our economy. Pass a clean bill to raise our debt
ceiling.
Ms. JENKINS of Kansas. Madam Speaker, I yield such time as he may
consume to the gentleman from California (Mr. McClintock).
Mr. McCLINTOCK. Madam Speaker, I know that this great Hall has become
a national gallery for hyperbole, but I think the opponents of this
measure have taken it to a whole new level. Pay China first, what
xenophobic nonsense.
China holds about 7 percent of our debt. Most of our debt is owed to
Americans, much of it in pension funds and debts to Social Security
pensioners.
If we don't maintain our credit, we can't meet any of our other
obligations, including our troops in the field. And if there is even a
suggestion that our sovereign debt is not absolutely secure, we could
see a spike in interest costs that will take money away from the very
programs that the Democrats say they are trying to defend. That is the
reality of it.
This is a question over whether we should guarantee the sovereign
debt of the United States, and I would ask
[[Page H7060]]
again: Why is it and how is it that my friends on the Democratic side
of the aisle can get wildly enthusiastic about taxpayers being forced
to guarantee loans to foreign corporations, foreign governments, or
domestic special interests and yet not be willing to guarantee the full
faith and credit of the United States simply by allowing the Treasury
Secretary to continue to borrow to meet our interest and principal
payments if we should ever reach a point where the debt limit has been
reached?
It is the debate over the debt limit that tends to roil markets. We
are going to meet our debt obligations, but that debate that is
required to review the policies that are driving our debt is what roils
those markets.
This calms that debate. This assures everyone who makes loans to the
Federal Government that their loans are secure. This keeps our interest
costs down, and it guarantees the credit of the United States that is
necessary to meet all of our other obligations.
Ms. JENKINS of Kansas. Madam Speaker, as I have no further speakers,
and I am prepared to close. I reserve the balance of my time.
Mr. LEVIN. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, this is an amazing debate. The gentleman from
California talks about guaranteeing. So you guarantee payments to
foreign debt holders. You won't guarantee payments to our veterans or
to kids with school lunches. You won't guarantee payments to people who
are doing medical research. You won't guarantee that.
So here is the problem: you are proceeding on a very partisan basis
on a bill that is going nowhere.
You say we need to raise the debt ceiling. We will, and we are going
to do it long before there is any consideration of the details about
which you speak.
{time} 1545
You talk about the need to control spending. We are going to pass a
debt ceiling. The disturbing thing is you come here on a partisan basis
when there is a crying need for bipartisanship. The only way the debt
ceiling can be raised is bipartisan, and you come here today strictly
partisan.
That is a bad omen because, in addition to the debt ceiling, there is
the continuing resolution. We have also the Medicare premium issue that
looms in a few days. We have a highway bill that looms in a few days.
The only way they are going to be resolved is on a bipartisan basis.
You come here with a bill that won't get, I think, a single Democratic
vote, and you know it, and yet your leadership sanctions you to do
this.
What does that mean for the future? It is deeply troubling. This is
demagoguery. It is an effort maybe to gain a few more Republican votes,
but this is too important for that. It is not policy, as I said before.
It is a ploy. When it comes to issues like this, it should be beyond
that kind of gamesmanship.
In this sense, it is kind of sad you are doing this. It raises
questions as to where your leadership is going to take this institution
in the future, when already on your side the public has such deep
disbelief in what you are doing. It is too late to ask you to pull
back. I urged that to your leadership some time ago. I guess we are
going to go forth. It is a frightful mistake to be doing it this way.
Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The Chair will remind Members that remarks
in debate must be addressed to the Chair and not to others in the
second person.
Ms. JENKINS of Kansas. Madam Speaker, I yield myself such time as I
may consume.
Congress still has a great deal of work to do to rein in spending.
While conversations to reduce Federal spending continue, we must also
continue to pay down our existing debt. The Default Prevention Act
before us today provides a responsible way to deal with our debt crisis
and protect the full faith and credit of the United States.
As we all know, if the U.S. defaulted on a debt payment, it would do
serious harm to the economy and to the hardworking Americans who make
this country great. This bill ensures that, even if the debt limit is
reached, the U.S. Treasury would not default on our existing
obligations to pay down the debt.
Again, this legislation does not increase the debt limit. Instead, it
actually prevents Treasury from issuing new debt to pay for any new
spending unless Congress passes a law to increase the debt limit, a
conversation for another day.
This bill, guaranteeing our debt, makes it possible to pay all the
bills that the minority claims to want paid. This bill takes the
important step of ensuring that Social Security benefits are paid in
full and on time. This legislation is a commonsense measure that will
protect our Nation's credit and integrity.
Once again, I strongly urge my colleagues to support it.
Madam Speaker, I yield back the balance of my time.
Ms. ROYBAL-ALLARD. Madam Speaker, I stand in opposition to H.R. 692,
the so-called Default Prevention Act.
Raising the national debt limit is a basic responsibility of
government which ensures America will be able to pay its bills. If we
do not raise the debt limit, our nation will default for the first time
in its history. Americans' retirement savings will plunge, and interest
rates for mortgages, student loans, credit cards, and car payments will
skyrocket.
That is why the American people and the American economy need a clean
debt limit extension bill that meets all of our financial obligations,
not just a few of them. Sadly, the Majority party's Default Prevention
Act does not meet this basic standard.
Their bill would guarantee payments above the debt limit to bond
holders in China and other foreign countries, without consideration for
meeting our obligations to the American people, including troops,
veterans, and small businesses. That is irresponsible and wrong.
Taking care of our veterans, troops, and small businesses should be
our priority, not guaranteeing payments to China and our other bond
holders. This legislation is the Majority's cynical attempt to pass a
debt limit bill and say the House is being responsible. The truth is it
is not an honest attempt to address the debt limit. The Majority's bill
is a sham. Our nation will be in default if we miss any payment for any
reason. And the Majority knows the bill will not become law, because
the President will veto it if it reaches his desk.
I urge my colleagues to oppose this pointless Default Prevention Act,
and-pass a clean debt limit extension bill that fulfills our
obligations to the American, people, avoids economic catastrophe, and
truly honors the full faith and credit of the United States.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 480, the previous question is ordered on
the bill.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. LEVIN. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________