Default Prevention

The Prioritize Spending Act

RSC Chairman Jordan urges all RSC Members to support the H.R. 2402: The Prioritize Spending Act would prevent the United States Government from going into default on its debts, even if the federal debt ceiling is breached.  This spending prioritization bill, which would “take default off the table,” is seen as this year’s consensus bill by most of the Members who last year introduced their own spending prioritization bills.

H.R. 2402, introduced by Rep. Daniel Webster (R-FL) would prioritize the following obligations (in order), should the federal debt ceiling be reached:

1.    Principal and interest on U.S. debt
2.    Pay for the Troops
3.    Vital National Security Priorities
4.    Social Security
5.    Medicare

Enacting this legislation soon, well in advance of the President requesting another debt-ceiling increase, would remove the Administration’s ability to threaten to default on the debt or to prioritize less-essential spending over essential obligations, while building confidence with the markets and credit-rating agencies.


Bill Text: Here

Outside Support:
Letter of Support from Citizens Against Government Waste
Letter of Support from The 60 Plus Association
Letter of Support from Independent Women's Voice

The Full Faith and Credit Act

H.R. 421: The Full Faith and Credit Act directs the United States Treasury, in the event the debt ceiling is reached, to pay principal and interest due on debt held by the public before making any other payments. The Treasury will have ten times more revenue than needed to cover interest and debt service this year, so there is no reason for the federal government to default on its obligations.

Amazingly, Treasury Secretary Geithner recently indicated that he might permit the United States to default if Congress does not increase the statutory debt ceiling this year. Maintaining the good credit of the United States is essential to economic prosperity and national security. A default on our debt would have catastrophic consequences, including loss of the nation’s triple-A credit rating, sky-high interest rates, and rapid inflation. This fallout would thwart any effort to return to robust job growth, prosperity, and balanced budgets. Enacting the Full Faith and Credit Act will ensure that default is the absolute last option available to the Treasury.

Sen. Pat Toomey (PA) has introduced the Full Faith and Credit Act in the Senate as S. 163, while Rep. Tom McClintock (CA-4), RSC Chairman Jim Jordan (OH-4), Rep. Virginia Foxx (NC-5), and Rep. Scott Garrett (NJ-5) are leading the charge in the House of Representatives.

About the Bill: 
H.R.421: The Full Faith and Credit Act - Bill Text
H.R.421: The Full Faith and Credit Act - Myth vs. Reality Fact Sheet
Frequently Asked Questions About the FFCA
Press Release: RSC Members Introduce Bill to Prevent Default on the Debt
Sen. Toomey Op-Ed in the Wall Street Journal
Member Letter Requesting FFCA be Included in the CR

Outside Support:
What People are Saying About the FFCA
What Economists are Saying About the FFCA
Letter of Support from Americans for Prosperity
Letter of Support from National Taxpayers Union
Letter of Support from the Council for Citizens Against Government Waste
Letter of Support from Americans for Tax Reform
Letter of Support from Citizens Against Government Waste
Letter of Support from The 60 Plus Association