October 10, 2013
Sean Neary/Meaghan Smith
Baucus: We Need to Pay the Nation's Bills, No Strings Attached
Finance Chairman, Secretary Lew Agree: Prioritizing Certain Payments After Breaching Debt Ceiling Is Not an Option
WASHINGTON – At a Senate Finance Committee hearing today with Treasury Secretary Jack Lew, Chairman Max Baucus (D-Mont.) warned that Congress must reopen the government and avoid breaching the debt limit or risk plunging the U.S. back into a deep recession.
“We need to reopen the government and pay the nation’s bills, no strings attached. We have a responsibility to avoid another economic disaster,” Senator Baucus said. “A default would be a financial heart attack. Social Security, Medicare, veterans’ benefits and highway funding would be slashed. Families would feel it firsthand with dramatic drops in their retirement savings. Jobs would be lost, home values would plunge and interest rates on mortgages and student loans would soar.”
He added that the nation’s economy must not be used as a bargaining chip to dismantle the Affordable Care Act and deprive millions of Americans access to health care.
“For more than 200 years, the United States has been true to its word, honored its obligations and paid its debts,” Senator Baucus said. “Yet today, a small group of hardliners is using our economy as a bargaining chip to repeal the Affordable Care Act. Let me be very clear: we’re not going to let that happen.”
Senator Baucus also reiterated today that the Treasury Department cannot “prioritize” some payments over others after breaching the debt ceiling. In a recent speech on the Senate floor, he said the prioritization plan would only put foreign creditors ahead of American taxpayers and leave critical programs – including Social Security, Medicare and Medicaid – competing for scraps of funding.
Secretary Lew agreed, saying, “Prioritization is just default by another name. There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets.”
“How can the United States choose whether to send Social Security checks to seniors or pay benefits to our veterans?” Secretary Lew asked. “How can the United States choose whether to provide children with food assistance or meet our obligations to Medicare providers?”
Senator Baucus said that Congress should work together to address the nation’s long-term budget challenges, including entitlement and tax reform, but not under threat of default. He and Majority Leader Harry Reid (D-Nev.) introduced a bill this week to avoid default by suspending the debt limit until December 31, 2014.