H.R. 807 - Full Faith and Credit Act
Former RSC Chairman Scalise urged all RSC Members to support the Full Faith and Credit Act which 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.
Fact Sheet; Bill Text; Constitutional Authority Statement
As we once again approach the need to increase the nation’s debt ceiling it is imperative that the message we, as a country, convey to our creditors and market participants is clear. There must be certainty that payments on our debt will be made despite the uncertainty of the legislative process.
The Full Faith and Credit Act will ensure that the ability and intention of the United States government to meet its debt service obligations are both clear and absolute. It does so by codifying the authority and responsibility of the Secretary of the Treasury to prioritize the payment of interest and principal on debt held by the public. It further codifies the Secretary's authority to delay any other type of payments as necessary to ensure that sufficient funds are available from revenue to make these debt and principal 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.
With respect to revenues collected in excess of the amount required for debt service, the uninterrupted commerce and well-functioning financial markets. By removing the threat of default, this bill will allow Congress to prudently consider and debate proposals that ensure our nation avoids a fiscal collapse resultant from gross overspending.
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.
National Taxpayers Union
Americans for Limited Government
Let Freedom Ring
Americans Tax Reform
Americans for Prosperity
Club for Growth