When the $16.4 trillion debt ceiling is exceeded, which is expected to happen next month, the Treasury can use its revenue to pay bondholders while cutting unneeded spending in the government, he says, according to The Hill.
The government takes in about $2.5 trillion a year, and only 10 percent of that goes for debt payments, Scalise says.
?The fact that we continue hitting the debt ceiling is a symptom of Washington?s spending problem, and hitting the debt ceiling does not immediately trigger a default,? he said. ?The Treasury Secretary has an obligation to preserve the credit rating of the United States and should pledge to continue making necessary interest payments to avoid default.
Manhattan Institute Senior Fellow Diana Furchtgott-Roth also scoffs at the notion that failure to lift the debt limit would cause a crisis. ?The whole idea that the United States is going to default on its debt is a joke,? she tells Newsmax's Moneynews TV.
?What it comes down to realistically is are we going to cut spending or are we not? Are we going to change the path that we?re on, or are we not? No one really believes we?re going to default.?
? 2013 Newsmax. All rights reserved.
Source: http://www.newsmax.com/US/scalise-debt-limit-increase/2013/01/11/id/471056
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