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President Barack Obama confers with Chief of Staff Denis McDonough as he talks on the phone in the Oval Office, Feb. 6, 2013. (Official White House Photo by Pete Souza)
"They want to do what?!?!? Yeah, we'll veto that. And tell them no negotiating over the debt limit either!"
With the statutory debt limit about two weeks away, the White House has issued a veto threat of a gambit being pushed by House Republicans to prioritize creditors ahead of everyone else in the event of a federal default.
The Administration strongly opposes H.R. 807, which would result in the Congress refusing to pay obligations it has already agreed to. American families do not get to choose which bills to pay and which ones not to pay, and the United States Congress cannot either without putting the Nation into default for the first time in its history. This bill would threaten the full faith and credit of the United States, cost American jobs, hurt businesses of all sizes, and do damage to the economy. It would cause the Nation to default on payments for Medicare, veterans, national security, and many other critical priorities. This legislation is unwise, unworkable, and unacceptably risky. Earlier this year, the Congress took a sensible approach to paying the bills it had already incurred by raising the debt limit. By contrast, the proposal in H.R. 807, which chooses which bills to pay, is a deeply irresponsible approach that is simply default by another name.

The President continues to work to find areas of compromise and common ground with both parties in the Congress, and has put forward a balanced approach to deficit reduction in his FY 2014 Budget that would bring down deficits and put the Nation's debt on a declining path as a share of the economy. But the President has been clear that he will not negotiate around whether to uphold the full faith and credit of the United States. Congress must pay the bills it has already racked up; failure to do so would put the Nation into default. The President will not tolerate political gamesmanship, which proved so harmful to the Nation's economy in 2011. For this reason, if the President is presented with legislation that would result in the Congress choosing to default on the full faith and credit of the United States, he would veto it.

Republicans say their proposal would prevent default, but the practical impact of their move would mean the government would be obligated to pay creditors, including foreign governments like China, before serving the needs of seniors who depend on Social Security or members of the armed services who depend on their salaries.

Originally posted to The Jed Report on Tue May 07, 2013 at 01:00 PM PDT.

Also republished by Daily Kos.


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