“Pay China First” Dead on Arrival

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The plan of some Tea Party Republicans to prioritize interest payments on the national debt in the event that the government’s statutory borrowing limit is not raised is “unworkable” and “harmful,” according to Treasury Secretary Tim Geithner.

The Full Faith and Credit Act, derisively dubbed the “Pay China First Act” by Democrats, would force the U.S. government to pay foreign holders of America debt before meeting other domestic obligations.

Under the plan, China would take precedence over soldiers, Social Security recipients, pension funds and a whole host of other American taxpayer investments.

“While your legislation seeks to ensure that debt service payments would continue to be made after the debt limit is reached, it does not protect from non-payment the other obligations of the United States, such as military and civilian salaries, tax refunds, contractual payments to individuals and businesses for services and goods, and many others,” Geithner said in a letter to the bill’s sponsor in the Senate, Republican Pat Toomey.

While Toomey and other supporters of the legislation say that the measure would allow the U.S. to avoid defaulting on its obligations without raising the debt ceiling, Geithner said that prioritizing payments would effectively be a default by another name.

“If payment of these obligations were abruptly stopped, the world would recognize it as a first-ever failure by the United States to meet its commitments,” Geithner said.

Despite the absurdity of the legislation, it is gaining some support among lawmakers – mainly freshman Republicans with ties to the Tea Party. So far, the bill has garnered 18 co-sponsors in the Senate and a similar version in the House has 15 Republicans signed on.

Toomey has even attached the legislation, as an amendment, to a bill reauthorizing the Federal Aviation Administration.

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