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What is the full Faith and Credit Act?
This act addresses the responsibilities of Congress and the country to ensure the credit of our country is maintained and to reaffirm the debt of the United States is solid. We are at a crossroads in our financial situation and our debt cannot continue on the path it is presently on and actions must be taken within the authority of the Constitution. Unlike other legislation generated by Congress it identifies the constitutional authority on which this act is based. Below is the part of the Constitution which gives Congress the authority to generate this legislation.
Article I, Section 8, Clauses 1 and 2 of the United States Constitution, which confer on Congress the power to collect and manage revenue for payment of debts owed by the United States and to borrow money on the credit of the United States.
Article I, Section 8, Clauses 1 and 2 United States Constitution
“The Congress shall have the power to lay and collect taxes, duties, imports and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imports and excises shall be uniform throughout the United States.”
To borrow money on credit of the United States.”
The current debt ceiling is fast approaching and there needs to be another agreement to raise the debt limit to ensure the United States does not default on its debts. While the amount of our debt is increasing each day more than half of the debt is held by Americans. China is often cited as one of our big creditors but information available cites China as holding about 10% of our country’s debt. There is no doubt that income vs spending must be brought under control but the intention of this legislation is to provide reference to the authority Congress has over our fiscal responsibilities.
The Secretary of the Treasury is a critical position within the structure of the federal government and this legislation reaffirms the authority which is held by the Secretary. This legislation reaffirms the authority of the Secretary of the Treasury which includes the facts below:
Re-affirms that the Secretary of the Treasury has always had the full authority to prioritize payments and the responsibility to do so to maintain the public credit;
Mandates the Secretary do so;
Directs the Secretary delay paying other obligations to assure the public credit is maintained;
Re-states the Secretary’s discretion to arrange the schedule for other payments in whatever manner he deems advisable.
The main goal of this legislation is to send a message to credit markets that the United States debt is solid. This proposal identifies some interesting statistics and they should be validated but statistics in legislation and their validation seems to be ignored or at least appear to be ignored when other proposals are being generated. It identifies that our revenues comprise 60 percent of our spending and our debt service comprise 10 percent. The fact that the spending by the federal government is only covered by 60 percent of the revenue is a fact which needs to be addressed.
It is true that figures can be manipulated and some evidence has been or appears to have been when different numbers regarding the costs of legislation being proposed. Many legislative acts are generated each year which spends billions of dollars on sometimes questionable programs or projects.
This proposed legislation and the authority Congress has in generating it must be taken seriously to ensure the credit of the United States is solid in terms of meeting our obligations as a country. While some opposition to this legislation may exist there are a number of outside organizations which support the principles engrained within it. These organizations may not be well liked by some Senators or Representatives but the fact that they support the action being taken they are sending a clear message to Congress to do the job for which they have been entrusted according to the Constitution. The organizations identified as supporting this legislation are:
National Taxpayers Union
Americans for Limited Government
Let Freedom Ring
Americans Tax Reform
Americans for Prosperity
Club for Growth
It is hoped that as this legislation is moves through the legislative calendar/schedule that it has the support both in the House of Representatives and the Senate in a bi-partisan manner. It basically takes the support of default on our obligations off the table. It would allow both chambers to work to come to an agreement to not only pay our obligations but to establish a plan, hopefully a long term plan. Continually pushing a decision for future Congresses to address the financial situation is wrong. Both parties should work together for the good of all citizens and the country to put our country on a sound financial path for the future. Citizens need some consistency for future years. The unknown actions of Congress regarding our fiscal health do not allow businesses to plan for their future by not knowing what costs they will incur.