New Republican legislation would require the U.S. to send huge amounts of money to our foreign creditors and major financial institutions before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury, if Congress doesn?t raise the debt ceiling. The bills are sponsored by Pennsylvania?s new tea-party backed Senator, Pat Toomey, and Rep. Tom McClintock of California. The reaction has been understandably blunt:
?Senator Toomey certainly has a fascinating perspective on our national priorities ? not to mention his obligations to his constituents- considering the Senator?s proposal would have us pay China before we make monthly payments to the millions whose Social Security check is the only thing standing between their ability to scrape by and falling into complete and utter poverty. Never mind that our current retirees were paying into Social Security long before China became our nation?s bank.? Forbes, 1/31“[T]his idea is unworkable,” said Deputy Treasury Secretary Neal Wolin in a statement. “It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment. Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments.” TPM Cafe
?House Republicans? new proposal to put foreign creditors ? including China ? before American families is deeply troubling and will hurt our economic recovery. There is no question that we must come together as a Congress now to put a long-term plan in place to reduce the deficit. But this country must not put China first, and fail to extend that same full faith and credit to American taxpayers. We must get our fiscal house in order, and at the State of the Union the President laid out ideas to tackle this challenge. But for the new Republican majority to do so at the expense of the economic security of American families and seniors is reckless and irresponsible. Democrats will fight any legislation that doesn?t put American families first.? Rep. Chris Van Hollen(D-MD)
?Hard to believe, but true: members of the new Republican majority have introduced legislation that rips the hard earned Social Security benefits out of the hands of seniors, widows and disabled workers?and hands them over to creditors like China. This ?Pay China First? plan would treat retired American workers as second class citizens in line behind foreign lenders even though Social Security had nothing to do with the nation’s $14 trillion debt. Working Americans want us to focus on cutting wasteful spending?and keep our hands off of their hard earned benefits.? Rep. Xavier Becerra (D-CA) Ranking Member of the Subcommittee on Social Security
One thing remains perfectly clear, Social Security has been targeted by many in Washington to pay the tab for mountains of debt it hasn?t contributed to and years of fiscal irresponsibility it has nothing to do with. The question is, will the American people allow fiscal hawks to get away with putting our retirees last?