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house Bill H.R. 422

If the Debt Limit is Reached, Should the Treasury Keep Borrowing to Pay for Social Security?

Argument in favor

Failing to service the national debt and defaulting could trigger a debt spiral that damages the entire U.S. economy. Reneging on Social Security would harm vulnerable populations. This bill will prevent this kind of disaster.

CareAK's Opinion
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01/25/2017
Social security is not an entitlement program. Every working American has paid into social security. It is your obligation to pay it back by whatever means necessary.
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Kate's Opinion
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01/25/2017
The Federal Government should pay back all the money stolen from the Social Security Trust.
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Rose's Opinion
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01/25/2017
Congress needs to STOP taking funds from SS!!!!
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Argument opposed

This bill lowers expectations by planning for Congress to fail to raise the debt limit. Lawmakers should focus on a solution rather than preparing a backup plan in case they fail to do what they need to.

Amanda's Opinion
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01/25/2017
The bill is poorly written and does not accomplish what is needed. If the debt limit is reached, the LAST service to be suspended should be Social Security. Every other non-life-or-death government payout, including Congress' paychecks, should be cut before SS.
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Hmactx's Opinion
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01/25/2017
Congress should stop stealing from SS. The bare numbers reveal it is solvent if gov't officials wouldn't use it as a personal bank account.
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Shari's Opinion
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01/25/2017
The money for social security was paid by employee and employer it needs to be there as promised. Raise the income limit to pay in.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedJanuary 10th, 2017

What is House Bill H.R. 422?

This bill would require the Dept. of the Treasury to continue borrowing after the debt limit has been reached. This ensures that the country can make good on its obligations related to mandatory spending and debt service. Essentially, this bill would make these types of debt exempt from the debt limit.

The Treasury would be required to issue debt obligations to allow the federal government to make payments on the principal and interest on the portion of the national debt held by the public or the Social Security Trust Funds. These obligations could not be used for paychecks for members of Congress.

If the Treasury uses the authority granted it by the legislation, it must report to Congress with accounting details on:

  • The principal on mature obligations and interest that is due or accrued;

  • Obligations issued under this bill.

Impact

Taxpayers; anyone who relies on Social Security benefits; and the Treasury.

Cost of House Bill H.R. 422

In the last session of Congress the CBO estimated that this bill wouldn't significantly add to the Dept. of the Treasury's administrative costs.

More Information

In-Depth: Sponsoring Rep. Tom McClintock (R-CA) also introduced this legislation in the 114th Congress because “the full faith and credit of the United States should not hang in the balance every time there’s a fiscal debate in Washington.”

During the 114th Congress, the Ways and Means Committee passed this bill by a vote of 23 to 15 amidst strong opposition from Democrats who said that it would “pay China first, and some Americans not at all.”

The Treasury has informed Congress that it will reach the federal debt limit in mid-March 2017.


Of Note: The term ‘debt held by the public’ refers to individuals, companies, state or local governments, Federal Reserve Banks, and foreign governments that own federal debt securities like bonds, T-bills, TIPS, savings bonds. Currently, debt held by the public accounts for about $13 trillion of the total national debt, which exceeds $18 trillion.

Once a country defaults on its sovereign debt, there is a risk of a debt spiral beginning. A debt spiral happens when interest rates on the country’s debt securities rise because of a default, which means that the government has to spend more money servicing its debt. In the absence of economic growth and increased tax revenue, this requires the government to issue more debt simply to service existing debt.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user NCinDC)

AKA

Default Prevention Act

Official Title

To ensure the payment of interest and principal of the debt of the United States.

    Social security is not an entitlement program. Every working American has paid into social security. It is your obligation to pay it back by whatever means necessary.
    Like (734)
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    The bill is poorly written and does not accomplish what is needed. If the debt limit is reached, the LAST service to be suspended should be Social Security. Every other non-life-or-death government payout, including Congress' paychecks, should be cut before SS.
    Like (351)
    Follow
    Share
    The Federal Government should pay back all the money stolen from the Social Security Trust.
    Like (502)
    Follow
    Share
    Congress needs to STOP taking funds from SS!!!!
    Like (414)
    Follow
    Share
    Congress should stop stealing from SS. The bare numbers reveal it is solvent if gov't officials wouldn't use it as a personal bank account.
    Like (229)
    Follow
    Share
    SS Should be refunded the money that was borrowed from it and made separate from any budget regulations.
    Like (150)
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    Quit stealing from the social security fund. Period! I expect it to remain solvent, or my vote will punish those in charge.
    Like (131)
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    The money for social security was paid by employee and employer it needs to be there as promised. Raise the income limit to pay in.
    Like (127)
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    Social security is paid for by citizens. Stop borrowing from it. It should be secured.
    Like (122)
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    Start by not building an unnecessary wall. And stop spending on unnecessary things, social security isn't the reason we have a deficit.
    Like (108)
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    We need to get our priorities right! Taking care of Our obligations to elderly Americans should be our top priority, not cutting taxes to the top 1/10th of 1%.
    Like (82)
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    People rely on this fund, they paid into it, and they deserve it. Do we really want to make our most vulnerable homeless and hungry? What does that say about American values?
    Like (72)
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    Social Security is NOT an entitlement. We've paid into this ever since we started working and depend on it in our retirement. Monies borrowed should be redeposited plus interest. We have to pay for Congress's pensions as well as healthcare.....that's entitlement. Congress should be required to live as we do.
    Like (67)
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    Have congress pay back the $3 trillion they owe SS first
    Like (58)
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    There are plenty of ways that we can "balance the budget" that don't involve hurting working class Americans. They could, for instance, tax the top one percent for the damage their excess creates, and make them pay their fair share.
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    Social security is not a gift. I paid into the fund for over 55 years. Put back in the monies congress (borrowed) stole from it.
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    The question Countable has as this bill's header is misleading and is slanted to evoke a negative response from the voters, which is what the Democrats want. My own initial response was negative, but I read the statement from Adam Brandon, CEO FreedomWorks and changed my mind about the bill. Mr. Brandon says: "This simple, common-sense piece of legislation would remove any possibility of defaulting on our national debt in the event that we reach our statutory debt limit. One of the most often-used and misleading talking points that always surrounds the debate over raising the nation’s debt ceiling is the specter of a default – that we could miss scheduled payments on the debt and damage our national credit. In reality, money is constantly coming into the federal coffers, and the Secretary of the Treasury decides where it is allocated. Realistically, the only way America would ever actually default on debt payments is if the Treasury (presumably with the president’s permission) deliberately chose to do so. Be that as it may, pundits and politicians continually stoke the fear of default any time the debt limit draws near. This bill would simply write into law that the Treasury must prioritize payments on the public debt and obligations to the Social Security Trust Fund first in the event that there is a freeze on new borrowing because the debt limit has been reached. With the default talking point off the table, perhaps the discussion over the debt limit can focus upon the massive national debt itself and the threat it poses to every American’s future prosperity."
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    That is not money that belongs to the government. The citizens of the United States are entitled to social security.
    Like (20)
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    As a citizen who has paid into SS my entire life I consider these monies mine. SS is not a social entitlement. Bad management of SS funds by elected officials is what is at work here! If elected officials deny citizens the funds that are rightfully earned, then I will work tirelessly against those elected officials in any future campaigns for re-election. I will actively work to make sure my elected officials lose in the next election!
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    They will have to!! It's wasn't theirs to spend! It is money earned by the American people and they have to pay it back by whatever means necessary! They should never be allowed to touch it in the first place!
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