Press Releases

Washington, Jan 10 -

                Republican Study Committee Chairman Steve Scalise today responded to President Obama’s nomination of Jack Lew to succeed outgoing Treasury Secretary Tim Geithner.  Scalise called on the Obama Administration to continue making interest payments to avoid default once the Treasury’s special measures to prolong the debt limit are exhausted.

               “The fact that we continue hitting the debt ceiling is a symptom of Washington’s spending problem, and hitting the debt ceiling does not immediately trigger a default,” Scalise said.  “The Treasury Secretary has an obligation to preserve the credit rating of the United States and should pledge to continue making necessary interest payments to avoid default.
 
                “The federal treasury takes in $2.5 trillion annually, and our debt service costs less than 10% of that amount. President Obama seems to be the only person in Washington irresponsible enough to threaten default on our nation’s debt.  Even after making all payments on interest, the federal treasury will still have 90 cents left on every dollar that comes in to prioritize all other spending. 

            “Washington liberals cannot continue sticking their heads in the sand while ignoring our skyrocketing $16 trillion national debt as if it doesn’t exist, and they cannot continue diverting blame to Congress or anybody else should they fail to do their jobs by prioritizing spending to avoid default.  America is quickly following the path paved by Greece, and it’s long past time for the liberals in Washington to finally recognize that we need to control government spending, balance our budget, and get our economy back on track.”

            The federal treasury takes in an estimated $2.5 trillion per year, more than enough to make the required FY13 $220 billion interest payments.  According to the GAO, the Secretary of the Treasury has the authority to choose the order in which to pay obligations of the United States.