Default Prevention Act of 2013 - Motion to Proceed

Floor Speech

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Mr. SCHUMER. Madam President, I thank my colleague from Virginia for his outstanding work. He knows this from a business perspective, an economic perspective, and a political perspective, and has been such a strong and vibrant voice about America paying its bills.

I would like to add a couple of things.

We have a group of people in the House and the Senate--not a majority--whom we call debt ceiling deniers. They deny that letting the debt ceiling lapse and going into default could be cataclysmic for America. They are wrong. Every person who has studied this knows it is wrong.

The debt ceiling deniers fall in two camps. Some say: Well, we can pay certain debts and not other debts and that would be all right.

Well, let them choose. Pick Social Security over veterans? Pick payments to pregnant mothers versus payments for food safety? We can't do it.

Then they say: Well, maybe we should just pay Treasurys that come due and not pay Social Security.

Well, let me tell you, as somebody who has consulted experts on the market, the overwhelming view is that if we don't pay any of our bills for the first time in U.S. history, the markets could very well freeze up, tighten, and create huge damage to our country.

The second group of debt ceiling deniers say: Well, we don't know the date.

And we don't. The markets are mystical, but once they come to their own most magical conclusion that the United States is going to default, we will be in trouble. That could be the 17th. It could be a day or two before, importuning us to action as soon as possible. It could be a little bit later. But we don't know when it is. And what a risk.

We are like a blindfolded man walking toward the edge of a cliff. If we keep walking, we will fall off. We can debate whether we fall off in 5 yards, 50 yards, or 500 yards, but we will fall off and we don't know what that line is. Why risk it?

I have one final point. This could be as bad or worse than the 2008 recession. It is the same basic principle. A very important security--in that case, mortgage securities, and in this case, Treasurys--loses tremendous value, the markets freeze, loans can't be made, interest rates rise, and then all the ensuing economic damage. Auto sales will go down and thousands of autoworkers will be laid off. Home sales will go down and construction workers will be laid off. That is what happened in 2008, and it could well happen again and be worse because this will be worldwide. U.S. Treasurys are probably the most widely held denomination of assets on financial institution books and deeper--more institutions have more of them than have mortgage securities. So we are playing with fire.

I make a plea to my colleagues on the other side of the aisle. I know we all have political agendas. I very much would like to see the immigration bill passed. We all have agendas that are very important to us. Please do not hold the debt ceiling and paying our debts hostage to any other condition. Pass the debt ceiling unconditionally, and then we can go back to our business, debate these issues, and see where the political chips fall. But please, for the sake of this country, for the sake of the men and women who labored before us and never let us default, do not play with fire, pass a clean debt ceiling, and let's move on and debate the other issues that so much deserve debate.

I yield the floor.

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