Representative Steven Horsford (NV-4) rejected the latest Republican plan to risk the full faith and credit of the United States.
The so-called "Full Faith and Credit Act" would require the U.S. Treasury to continue to borrow once the statutory debt limit is reached -- but only to pay the principal and interest on government debt held by the public and by the Social Security trust funds, not to pay other legal obligations.
"This bill is nothing more than a plan for default," said Horsford. "We should not forget what happened the last time Republicans drove our nation toward default: taxpayers were forced to spend $1.3 billion more in interest payments because of the resulting credit downgrade, the stock market plummeted, and the economy added jobs at the slowest pace in the last two years. I refuse to take part in the GOP effort to manufacture economic uncertainty."
Under the measure, Treasury would be forced to default on many other obligations. Obligations not guaranteed by the bill include pay for active-duty military, veterans' benefits, Medicare and Medicaid payments, and payments to small businesses.
The bill would ensure that if House Republicans cause default, bondholders from China and other nations would be paid first, putting at risk payments to 1.4 million active duty troops and 780,000 activated reserves and National Guard, 3.4 million disabled veterans who served their country with honor, 1.3 million veterans who receive education or home purchasing assistance, American small businesses that sell goods and services to the government, and doctors and hospitals that treat the 50 million Medicare patients across the country.