Skip to comments.Republicans push alternative to default in debt-ceiling battle
Posted on 01/16/2013 9:36:44 AM PST by SeekAndFind
WASHINGTON (Reuters) - Republican lawmakers are preparing to introduce legislation to direct the U.S. Treasury to make interest payments on U.S. bonds first and then prioritize other government outlays in case Congress does not raise the debt ceiling.
Supporters of the idea see it as a politically palatable alternative to default, which could rattle markets as occurred in the summer of 2011. The likelihood of another market-unsettling event is challenging Republicans to find another idea as they use the debt ceiling as leverage to extract spending cuts from President Barack Obama.
But critics, including some Republicans, say prioritizing payments is largely unworkable and would not fool the markets.
The Treasury hit the $16.4 trillion debt ceiling, or the legal amount it is allowed to borrow, on New Year's Eve and started moving funds around so that the government can continue paying its bills. But the department said it will run out of funds as early as mid-February.
Among those advocating the approach is Republican Senator Pat Toomey of Pennsylvania, who is expected to reintroduce legislation next week to instruct the Treasury to make sure bondholders got paid first if Congress does not raise the debt ceiling by the deadline.
In the House of Representatives, Arizona Republican David Schweikert introduced legislation that would force the Treasury to prioritize payments to bondholders, Social Security recipients and military salaries.
"No one is talking about default except for the president," said Patrick Tiberi, a Republican Representative from Ohio who heads a tax-writing subcommittee.
"He doesn't need to default because he has enough revenue, money coming in from the taxes that you guys pay to pay bills," Tiberi told reporters.
"Ninety-nine percent of my constituents would say that sending out Social Security payments and keeping veteran hospitals open is a bigger priority than national parks,"
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I like it.
The tragedy of the past 2 years is this — everytime a reasonably good bill gets passed by the House (e.g. repeal Obamacare), it DIES in the Senate.
This one will be no different.
EDIT TO ADD:
And even if the Senate were re-taken by conservatives in 2014 (I can dream ), we still have Obama’s VETO PEN to contend with till 2016.
This is what America voted for in 2012...