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Tuesday
Jul262011

GOP in House and Senate Call for Prioritizing Payments Post-Aug. 2 if No Deal

Jupiterimages/Thinkstock(WASHINGTON) -- More than a dozen conservatives in the House and Senate came together to introduce legislation to “prepare for the worst” by prioritizing payments if the debt ceiling is not raised by Aug. 2.

“At this late stage in the process it is obvious now to everybody that it is possible, increasingly possible, that we will have not raised the debt ceiling by August 2nd,” Sen. Pat Toomey, R-Pa., said at a press conference Tuesday. “And if August 2nd does indeed pass without the debt ceiling having been raised, we believe that it’s absolutely essential that the federal government have a plan for prioritizing the payments that can and should and really must be made using the resources that the government will have.”

The president has said he couldn’t guarantee payments for social welfare programs such as Social Security or veterans benefits if the government doesn’t receive permission to borrow more funds.

Toomey said the administration’s suggestion that Social Security would not be paid are “scare tactics meant to intimidate congressional Republicans” into voting for a package the administration wants.

The bill unveiled Tuesday, called the “Full Faith and Credit Act,” makes certain obligations priorities, so that they will be paid in full even if the government fails to raise the debt ceiling by Aug. 2.

The three priorities are: interest on the debt, Social Security payments and payroll for active military duty personnel.

Members of Congress Tuesday insisted that this legislation is not a substitute for raising the debt limit, but rather is a mechanism to “minimize disruption” if the deadline is not reached.

“I continue to hope that this legislation never needs to be implemented,” Sen. Toomey said, “but it would be very, very irresponsible to be unprepared or worse to be unwilling to minimize the potential for disruption.”

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ABC News Radio