With the debt ceiling deadline looming, Republican senators plan to introduce a bill next week that would ensure priority payments to three groups: bond investors, seniors and soldiers, according to CNNMoney.
Sen. Pat Toomey, R-Penn., and more than 30 Senate Republicans plan to introduce the “Ensuring the Full Faith and Credit of the United States and Protecting America’s Soldiers and Seniors Act.”
The bill is meant to buy time if Congress refuses to raise the debt ceiling by Feb. 15 and the government ends up short of cash to pay its bills on time, CNNMoney said. The proposal would require that revenue flowing to the Treasury Department would first be allocated toward the U.S. debt, Social Security and active-duty military pay.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
If the revenue isn’t enough to cover those payments, the bill would give limited authority to the Treasury to increase the debt ceiling by the margin needed to make those priority payments, according to CNNMoney.
House Republicans discussed the proposal this week during their retreat at a golf resort outside Williamsburg, Va., Bloomberg reported.
“We are discussing the possible virtue of a short-term debt-limit extension so that we have a better chance of getting the Senate and White House involved in discussions in March,” Rep. Paul Ryan, R-Wisc., said.
“What we want to achieve at the end of the day is a two-way discussion between Democrats and Republicans and out of that hopefully some progress being made on getting this deficit and debt under control,” Ryan, the House Budget Committee chairman, told reporters, according to Bloomberg.
The bill would be a revamped version of legislation the same group proposed in July 2011 during the last debt ceiling standoff, only the latest proposal would allow Treasury to raise the ceiling for priority payments.
The White House and Treasury are unlikely to welcome the measure.
“Choosing whether you pay Social Security beneficiaries, or combat troops in Afghanistan, or veterans who depend on the VA for benefits or bond holders — these are choices about default,” White House press secretary Jay Carney said.
The Treasury declined to respond. Instead, it highlighted comments Treasury Secretary Tim Geithner made in 2011 in response to a proposal to prioritize interest payments on the debt.
“This ‘prioritization’ proposal advocates a radical and deeply irresponsible departure from the commitment of presidents of both parties throughout American history, to honor all commitments our nation has made,” Geithner wrote in a letter to a senator.
Generally speaking, the Treasury does collect enough revenue each month to pay interest, Social Security and active military, which combined are about a quarter of what comes the government owes. But different bills come due every day and available revenue differs, CNNMoney reported.
“We aspire to give the country a very specific and clear vision of what we think is the right way to go,” Ryan said. But Republicans must “recognize the divided-government moment that we have and the fiscal deadlines that are approaching.”
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
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