The Debt Crisis

The Debt Crisis

October 14, 2013

 
Mr. Speaker:

 

The debt limit exists for a simple reason: to assure that public debt isn’t recklessly piled up without Congress periodically acknowledging it and addressing the spending patterns that are causing it.  If a debt limit increase is supposed to be automatic, as the President suggests, there really is no purpose to it.

A new dimension has now appeared in this discussion.  Unlike every one of his predecessors, this President has vowed that unless Congress unconditionally raises the debt limit, the United States will default on its sovereign debt.

But a failure to raise the debt limit would not by itself cause the nation to default. The Government Accountability Office has consistently held that the Treasury Secretary has “the authority to choose the order in which to pay obligations of the United States” to protect the nation’s credit.  Such authority is inherent in the 1789 act that established the Treasury Department and entrusted it with the “management of the revenue” and the “support of public credit.”  The affirmative duty of the Treasury Department to do so is underscored by the 14th Amendment.

Our revenues are more than ten times our debt payments, so paying the debt first to prevent a sovereign default is well within the financial ability of the federal government – and indeed, it is a fiscal imperative. 

Earlier this year, the House passed HR 807, which not only explicitly requires the payment of the national debt in the case of an impasse over the debt limit, but even allows the President to exceed the debt limit itself in order to protect the nation’s credit.

That measure languishes in the Senate under the threat of a Presidential veto.

Protecting the sovereign credit by prioritizing payments would mean delaying paying other bills – which is untenable, unthinkable and something much to be avoided.  But it would not imperil the nation’s sovereign credit.  Only the President can do that. 

The House leadership met with the President last week and offered to extend the debt limit until November 22nd with no strings attached.  The President refused.  Senate Republicans offered a six month extension, but the Senate Democratic leader refused. 

  What the President threatens to do would be catastrophic and unprecedented.  The full faith and credit of the United States is what gives markets the confidence to loan money to the federal government.  Even a credible threat of default – exactly the kind the President is now making -- could have dire consequences to a nation that now owes more than its entire economy produces in a year. 
So where do we go from here? 

Republicans have miscalculated on two key assumptions: First, that the Democrats would negotiate the issues that divide the country; they have not.  Second, that Democrats would seek to minimize the suffering caused by the impasse; they have not.  

Given the ruthless and vindictive way the shutdown has been handled, I now believe that this President would willfully act to destroy the full faith and credit of the United States unless the Congress acquiesces to all of his demands, at least as long as he sees political advantage in doing so.  His every statement and action is consistent with this conclusion.  

If the Republicans acquiesce, the immediate crisis will quickly vanish, credit markets will calm and public life will return to other matters. 

But a fundamental element of our Constitution will have been destroyed.   The power of the purse will have shifted from the representatives of the people to the executive.  The executive bureaucracies will be freed to churn out ever more outlandish regulations with no effective Congressional review or check through the purse.  A perilous era will have begun, in which the President sets spending levels and vetoes any bill falling short of his demands.  Whenever a deadline approaches, one house can simply refuse to negotiate with the other until Congress is faced with the Hobson’s choice of a shut-down or a default. 

The nation’s spending will again dangerously accelerate, the deficit will again rapidly widen, and the economic prosperity of the nation will continue to slowly bleed away. 

This impasse may have started as a dispute over a collapsing health program but it has now taken on the dimensions of a Constitutional crisis. 

Yesterday in Washington, a group of America’s veterans rose up to take a stand against these constitutional usurpations.  I believe the salvation of our nation now depends on the American people joining them.

 

 
 
 

Tele-townhall banner 

Latest News

Statement on the President's Amnesty Order

Last night, the President asserted a power to nullify existing immigration law by ordering the executive branch to ignore it.

In Memory of Deputy Danny Oliver and Detective Michael Davis

On October 24, Sacramento County Sheriff's Deputy Danny Oliver and Placer County Detective Michael David Davis were wantonly gunned down in one of the most cold-blooded rampages in the history of either county. By all accounts, these were exemplary law enforcement officers, fathers, husbands, sons and neighbors.

Statement in Response to the Proposal of the National Park Service to Increase Entrance Fees, Including those Charged to Visitors at Yosemite National Park:

Last year, Yosemite Park management sought to drastically reduce the park's amenities that attract visitors and generate revenues. This year, it seeks to increase admission fees on those same visitors by 50 percent.

View more »

Search

Connect with Tom

  • Twitter
  • Facebook
  • YouTube
  • News Feed

Upcoming Events

Staff Satellite Office Hours

Office staff members are available to assist constituents with problems or concerns at satellite office locations held throughout the district.  Anyone wishing to discuss an issue of federal concern is invited to attend one of these satellite office sessions and speak with a member of staff.  For more information, or to reach staff, please call the district office at 916-786-5560.
  
Upcoming Staff Satellite Office Hours for November:
 
Amador County
 
Jackson 
Tuesday, November 25th
9:30 am - 11:30 am
Conference Room D
County Administration Center
810 Court Street
 
Calaveras County
 
San Andreas 
Tuesday, November 25th
9:30 am - 11:30 am
Calaveras County Water Agency Conference Room
120 Toma Court
 
El Dorado County
 
Camino 
Thursday, November 13th
9:00 am - 11:00am
Camino Pollock Pines Chamber of Commerce
4123 Carson Road
 
El Dorado Hills 
Thursday, November 13th
12:00 pm - 2:00 pm
El Dorado Hills Chamber of Commerce
2085 Vine Street, #105
 
Fresno County
 
Auberry 
Thursday, November 13th
11:00am - 1:00pm
The Auberry Library
33049 Auberry Rd
 
Madera County

Oakhurst 
Wednesday, November 5th
10:00am - 12:00pm
Yosemite Visitor Bureau Conference Room
40637 Highway 41
 
Coarsegold 
Wednesday, November 5th
3:00pm - 5: 00pm
Yosemite Lakes Park Clubhouse
30250 Yosemite Springs Parkway
 
Mariposa County
 
Mariposa 
Wednesday, November 
19th
4:00pm - 6:00pm
Library Conference Room
4978 10th Street
 
Placer County
 
Auburn 
Wednesday, November 12th
9:00am - 11:00am
Auburn City Hall
Room #10
1225 Lincoln Way
 
Lincoln 
Wednesday, November 12th
3:00 pm - 5:00 pm
Lincoln City Hall
600 6th Street
 
Rocklin 
Tuesday, November 25th
3:00 pm - 5:00 pm
Rocklin City Hall
3970 Rocklin Rd
 
Tuolumne County
 
Sonora 
Tuesday, November 25th
1:00 pm - 3:00 pm
Small Business Center Conference Room
99 North Washington St
 
For further information on staff satellite office hours, please call 916-786-5560.