Sen. Pat Toomey (R-PA) is trying to attach a controversial debt-limit provision to an unrelated aviation bill, now on the Senate floor.
As described here, the measure would manage the fallout of a default on the national debt by prioritizing Treasury payments to investors — foreign countries, financial institutions — over other obligations like Social Security beneficiaries and veterans benefits, among others.
In one sentence of legalese, “In the event that the debt of the United States Government… reaches the statutory limit, the authority of the Department of the Treasury…t o pay with legal tender the principal and interest on debt held by the public shall take priority over all other obligations incurred by the Government of the United States.”
Toomey filed the amendment, which you can read here, on Tuesday evening. But that doesn’t mean it’ll come up for a vote. Democrats have attacked the idea pretty severely — calling it the ‘Pay China First’ plan. Toomey defended the plan on Tuesday. But Dems still control the Senate, so don’t expect a big fight over this unless GOP leadership makes an issue of it.
Late update: Toomey’s office emails to point out that “50% of U.S. debt is held by millions of Americans as part of their 401k plans, pension plans, and retirement savings.” So it’s not really a black-or-white choice between investors and entitlement beneficiaries.
Brian Beutler
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at brian@talkingpointsmemo.com.
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