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Chairman Smith Opening Statement: Markup of Default Prevention Act 

March 09, 2023

As prepared for delivery

This morning we will consider the Default Prevention Act, introduced by Rep. McClintock of California. We also have an amendment in the nature of a substitute that will build on Mr. McClintock’s bill to take off the table the risk of defaulting on our debt, to protect our seniors, and to prioritize those who defend this nation each and every day.

The amendment to the bill will also hold Washington politicians accountable by prohibiting them from being paid until all other federal obligations have been met. If debt limit negotiations are delayed, politicians in Washington, including the President, Vice President, and Members of Congress, won’t get paid until we do our job.

The Constitution vests Congress with the “power of the purse.” The will of Congress must be respected when the President spends tax dollars and dollars borrowed against our credit. Sadly, the Biden Administration often spends money outside of congressional approval – most notably its student loan giveaway to the wealthy that is before the Supreme Court as we speak. Reining in that behavior is why the legislation before this committee today is all the more important.

The Biden Administration and congressional Democrats are misleading the public about Republicans’ commitment to protecting our seniors and America’s economic credibility. This legislation clarifies that record. I am actually surprised my colleagues on the other side aren’t supportive of this legislation. After all, the bill says that we will NEVER default on our debt, and seniors will always be protected. While I know this doesn’t abolish the debt ceiling like so many of them would like, surely this is a step they could support.

This legislation allows us to remove the politics and fearmongering that often clouds these debates. And it allows us to get on with the work to address America’s debt limit and rein in the reckless spending that threatens our country’s fiscal well-being and that of the American people. Working families are struggling right now because of the inflationary spending policies of the past two years. They need relief while we address our nation’s debt limit.

Despite record high revenues, this year we are expected to spend about $1.29 for every $1 of taxes we take in and that’s expected to grow to $1.40 for every dollar of revenue over the next ten years. This makes it clear: Washington doesn’t have a revenue problem, it has a spending problem. And Washington hit the limit on what it can borrow, despite the Democrats voting for a $2.5 trillion debt limit increase in December 2021, the largest single debt limit increase in our nation’s history. We once again reached the statutory debt this January.

Given how quickly Democrats reached the borrowing limit they themselves set, it’s time Congress exercise its constitutional prerogative to ensure that we protect America’s credit and our seniors, and prioritize our military, their families, and our national security. My amendment would require the Biden Administration to abandon its brinksmanship that puts our nation in jeopardy. Instead it should protect and proceed forward in a bipartisan way.

The legislation that we will consider today is not a substitute for addressing the debt limit, but it would ensure that we could avoid default – as the United States would be able to service its debt – and as importantly, we would be able to continue to provide health and retirement security to America’s seniors.

This bill ensures the Biden Administration will focus first and foremost on protecting those serving in uniform and veterans’ benefits. Our veterans who have fought to protect this country and those who wear the uniform today must be a priority.

Lastly, this bill tells the Administration that certain areas of spending should be sent to the back of the line. It prohibits the Treasury from paying items such as congressional pay, White House pay, government travel and so on unless all other obligations of the federal government have already been met. Just like regular Americans, the President and Congress shouldn’t get paid until the job is done.

This good-faith effort steers the nation in a responsible direction while we restore some fiscal sanity to our government. This is not in lieu of our other responsibilities to address America’s debt limit. It complements those efforts. It is certainly no replacement for a responsible plan to roll back the wasteful and reckless government spending that we know exists in the federal budget.

This legislation allows Treasury to issue new debt and even echoes calls from those who want to see the debt ceiling raised with zero fiscal reforms. But I suspect my friends on the other side will still find a way to put politics over people and oppose this good-faith effort to avoid default and to protect seniors. Democrats will argue today that this bill pays China, while ignoring the fact that the largest holders of our debt include the Social Security trust fund, the Federal Reserve, pension funds of union workers, and the 401ks of millions of retirees.

If they suddenly care so much about China, why not support legislation that prioritizes the national security of American families and makes sure our military men and women are paid? Where was the concern out of Washington Democrats over the last two years when they increased spending by 10 trillion dollars and ran up record deficits that made us more beholden to China? What about the fact that taxpayer dollars from their so-called Inflation Reduction Act are being used to attract investment and ownership from the Chinese Communist Party right here in the United States?

I haven’t heard any of my friends raise any flags there, and the irony is clear. Democrats trying to talk tough on China is, as we say in Missouri, hogwash.

Congress should be able to walk and chew gum at the same time. Let’s advance the Default Prevention Act while we work on the broader negotiations towards a plan to begin to put our fiscal house in order.