Hensarling Votes to Remove Specter of Default on Sovereign Debt and End Obama Administration’s Manufactured Crisis
WASHINGTON—U.S. Congressman Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, issued the following statement upon House passage of the Default Prevention Act (H.R. 692), which he cosponsored.
“That sound we hear is the alarm of our debt ceiling telling us our nation’s fiscal house is on fire. Instead of simply turning off the alarm, we must put out the fire.
“Our nation is on the precipice of a spending-driven debt crisis. Despite collecting a record $3.25 trillion in taxes in the just-completed fiscal year, our nation still spent $439 billion more than it received. Clearly, the problem isn’t lack of revenue as some suggest. The problem is that Washington is spending money we don’t have and borrowing from the futures of our children and grandchildren—setting up a legacy of little more than an $18 trillion and growing national debt.
“Raising the debt limit allows our nation to pay bills and obligations already incurred. However, the nation’s debt ceiling places a speed-bump on the road to national bankruptcy by forcing Congress to actively allow the nation to borrow more money instead of simply allowing Washington to keep spending unchecked. In other words, the debt ceiling gives Congress an opportunity to address the unsustainable fiscal path we find ourselves on.
“President Obama and Congressional Democrats should fear the debt, but instead they promote fear over the debt ceiling. Unfortunately, Democrats have taken the nation’s creditworthiness and economy hostage in a cynical attempt to create a crisis that maximizes the Administration’s leverage. Even though President Obama is using the specter of default as a political weapon, House Republicans will not. That’s why we have passed the Default Prevention Act to take a default on our nation’s sovereign debt off the table.
“In the event that the debt ceiling is not raised and the federal government cannot meet all of its obligations, this legislation allows the Treasury Department to prioritize principal and interest payments on our national debt. Given that interest on our national debt accounts for approximately 7 cents out of every revenue dollar, this explicit authority would be more than enough prevent a default on sovereign debt. In other words: if this legislation becomes law, the only way our nation defaults on our sovereign debt is if President Obama and Treasury Secretary Jack Lew decide to not to pay it.”