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House Passes Bill To Prioritize U.S. Debt Payments

Thursday, May 9, 2013 - 5:23 PM
The GOP-controlled House voted Thursday to put U.S. bondholders and people on Social Security at the front of the line to be paid if the government hits its borrowing limit. Democrats opposing the legislation said it would guarantee a downgrade of the debt by suggesting the nation would be willing to pay some of its bills and not others. They've dubbed it the "Pay China First Act," saying it prioritizes payments to foreign investors over funding important domestic programs, including benefits for veterans and soldiers, Medicare and companies that do business with the government.

House passes bill to prioritize U.S. debt payments | The Detroit News | detroitnews.com
5
ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,582
1. Saturday, May 11, 2013 - 4:30 PM
Shorebreak:  Plueez go back to the weirdo guy avatar.  The one of Bernanke is too much to cope with when it comes to real "weirdo" photos!

Now as to the gov paying off Social Security as one of the firsts:  Why not?  They are just giving us back money they forced us to pay to them with promises they can't keep!  They can't kill us with zero interest rates AND take away our social security too!  That would be an abomination!  You have to realize that many seniors couldn't or didn't have the funds to save and taking social security from them will just burst open tons of new people on the welfare rolls.  They have already penalized us for being savers, would it be fair to finish us off by destroying our SS benefits?  This country needs to find people without fried brains to run it! 

I need to find a group to go to Washington with and start beating on our politician doors with our canes!  I'll call the group  "CANES FOR NO BRAINS!!"
2
paoli2paoli21,140 posts since
Aug 10, 2011
Rep Points: 5,078
2. Saturday, May 11, 2013 - 5:54 PM
Doesn't look like any choice will have to be made. The gov actually paid back part of the debt last quarter. Budget deficit is projected to be down 30% after the first half of the budget year. 
1
AllyAlly772 posts since
Jan 16, 2010
Rep Points: 2,248
3. Sunday, May 12, 2013 - 12:08 PM
Dear rosie43,

Indeed ... looks that way.

The name of the act "Full Faith and Credit Act", makes it crystal clear that our Federal Government takes its "public debt" very seriously, and finds it paramount to pay the "public" who hold the "bonds" first.

A few words from the Act:
In General- In the event that the debt of the United States Government, as defined in section 3101 of title 31, United States Code, reaches the statutory limit, the authority of the Department of the Treasury provided in section 3123 of title 31, United States Code, to pay with legal tender the principal and interest on debt held by the public shall take priority over all other obligations incurred by the Government of the United States.

Totally agree. 

Democratic idea of politicizing the debt by calling it "Pay China First" diminishes the "Faith", the bond holders have placed in the US Federal Government.  Glad to see that the house over-rode this opposition.  (I suspect the Senate won't be passing this bill, and the President has threatened to veto.)   The fact is that the Treasuries are not merely held by the Chinese. They are held by whole lot of entities besides the Chinese as the table at the link below shows:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
...

Idea of paying Social Security Benefits, before paying principal and interest to the treasury bond holders is quite ludicrous.  And so is the idea of paying active duty troop, disabled veterans and government contractors before paying the treasury bond holders.

Imagine a granny who counted on the "full faith" of the US Government, and lent some money to the government years/decades ago by buying a T-Bond, and so how about we call the bill "Pay old Granny before paying the active duty Warrier" ... Sounds more palateble ... No?  ... Much better than "Pay China First" ... Right?

...

In my opinion the "bond" made between the US Federal Government and the various entities that are willing to lend money to the US Government must take priority over the supposed "compact" between generations.

Yours Truly,
- Anon
1
ytytytytytytytyt158 posts since
Jan 28, 2013
Rep Points: 623
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