Floor Statement in Opposition to the GOP’s Pay China First Act

Ways and Means Committee Ranking Member Sander Levin (D-MI) today made the following statement on the House floor in opposition to the Pay China First Act:

I want to state the facts here so everybody understands them. We have called this – the Speaker has in essence – the Pay China first and so many others except for Social Security beneficiaries last. 

And here's the reason: Of the prioritized debt covered by this bill, 47% is foreign owned. And China bondholders are the largest portion of that foreign ownership. So essentially what this bill says is, ok, let's pay China and the other foreign bondholders first, not American troops, not disabled veterans, not physicians, not providers who treat Medicare patients, not small businesses holding contract obligations from the United States. School lunch programs come secondary, medical research, Pell Grants, taxpayers due refunds and interestingly, other federal trust funds holding treasury bonds, Medicare, deposit insurance, etc., etc. That's the fact. That's the fact. 

So why do this? Well, Republicans say let's do this because of the importance of paying the bonds in terms of our economy and in terms of our bond rating. But let me just say a word about bond rating. Here's what Fitch has said: “it is not assured that the Treasury would or legally could prioritize debt service over its myriad of other obligations, including Social Security payments, tax rebates and payments to contractors, employees. Arrears on such obligations would not do anything from a sovereign rating perspective, but very likely prompt downgrade even as debt obligations continued to be met. 

S&P has already downgraded us and said this: Still sudden cuts that shave off say 6% of the GDP to spending ratio would cause economic panic and could affect ratings.” So why is this being done when a former Bush administration economist said the result is a bloody mess or another Bush administration official said, and I quote, “prioritization is impossible. Is the government really going to be in the position of withholding benefits, salaries, rent, contract payments in order to pay off treasury bondholders?”

So why is this being done? It's not going anywhere in the Senate. The president opposes it. I think the reason apparently it's being done is to satisfy some within the Republican conference or maybe to try to provide some leverage in terms of bargaining with the Democrats. 

This is playing with fire, with the economy of this country. Those who vote for it, playing with this fire, are going to burn themselves, and most significantly, the economy of the United States. I've tried to figure out who the pied piper is of this – the pied piper is of this proposition. It's hard to figure it out, but those who follow that pied piper and the Republican ranks, those who vote for it, essentially are moving towards the cliff, following that pied piper. But worse off, it places this country once again and this economy in danger of going over the cliff. This is not only a mistaken idea, it's really a rotten one. Let's vote no.

###