Feds Can Pay Obligations Without Raising Debt Ceiling — Sen. Pat Toomey (R-Pa.) is praising the passage of the Full Faith and Credit Act by the U.S. House of Representatives last week.
“The legislation will ensure that the U.S. government does not default on its debt by requiring the Treasury to prioritize payments on the debt in case the debt ceiling is not raised,” Toomey said.
Toomey authored the Senate version of the bill to protect Social Security benefits and military pay and to require that our government prioritize all obligations on the debt held by the public in the event that the debt limit is reached.
“For months, some political leaders have argued that failure to raise the debt ceiling would necessarily cause the United States to default on its debt,” Toomey said. “This is not the case. If Congress refuses to raise the debt ceiling, the federal government will have more than enough money to service its debt.”
He noted that that this year, about 6 percent of all projected federal government expenditures will go to pay off the interest on our debt, and tax revenue is projected to cover about 76 percent of all government expenditures.
“We need to end government by crisis,” he said. “We need to take the default scare tactics off the table. As the sequester proved, limiting spending does not cause the sky to fall. The Full Faith and Credit Act will allow Congress and the President to have a frank discussion about putting our nation on a path to balance by taking the specter of default off the table.”