29–006 

113TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 113–48 

FULL FAITH AND CREDIT ACT 

APRIL 30, 2013.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. CAMP, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 807] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 807) to require that the Government prioritize all obligations on the debt held by the public in the event that the debt limit 

is reached, having considered the same, report favorably thereon 

with an amendment and recommend that the bill as amended do 

pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Full Faith and Credit Act’’. 

SEC. 2. PAYMENT OF PRINCIPAL AND INTEREST ON PUBLIC DEBT AND SOCIAL SECURITY 

TRUST FUNDS. 

(a) IN GENERAL.—In the event that the debt of the United States Government, 

as defined in section 3101 of title 31, United States Code, reaches the statutory 

limit, the Secretary of the Treasury shall, in addition to any other authority provided by law, issue obligations under chapter 31 of title 31, United States Code, to 

pay with legal tender, and solely for the purpose of paying, the principal and interest on obligations of the United States described in subsection (b) after the date of 

the enactment of this Act. 

(b) OBLIGATIONS DESCRIBED.—For purposes of this subsection, obligations described in this subsection are obligations which are— 

(1) held by the public, or 

(2) held by the Old-Age and Survivors Insurance Trust Fund and Disability 

Insurance Trust Fund. 


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(c) OBLIGATIONS EXEMPT FROM PUBLIC DEBT LIMIT.—Obligations issued under 

subsection (a) shall not be taken into account in applying the limitation in section 

3101(b) of title 31, United States Code, to the extent that such obligation would otherwise cause the limitation in section 3101(b) of title 31, United States Code, to be 

exceeded. 

(d) REPORT ON CERTAIN ACTIONS.— 

(1) IN GENERAL.—If, after the date of the enactment of this Act, the Secretary 

of the Treasury exercises his authority under subsection (a), the Secretary shall 

thereafter submit a report each week providing an accounting relating to— 

(A) the principal on mature obligations and interest that is due or accrued of the United States, and 

(B) any obligations issued pursuant to subsection (a). 

(2) SUBMISSION.—The report required by paragraph (1) shall be submitted to 

the Committee on Ways and Means of the House of Representatives and the 

Committee on Finance of the Senate. 

(3) TERMINATION.—The report requirement under paragraph (1) shall cease to 

apply after the date of the enactment of the first increase in the limitation in 

section 3101(b), United States Code, after the date of the enactment of this Act. 

I. SUMMARY AND BACKGROUND

A. Purpose and Summary 

The bill, H.R. 807, as ordered reported by the Committee on 

Ways and Means on April 24, 2013, requires the Secretary of the 

Department of the Treasury (Treasury) to issue new debt when the 

statutory debt is reached to pay principal and interest on debt held 

by the public and provide Treasury access to Social Security Trust 

Funds notwithstanding the debt limit. In addition, the legislation 

requires the Secretary to submit to Congress a weekly accounting 

of the principal on mature obligations and interest that is due or 

accrued and any obligations issued pursuant to the new authority. 

B. Background and the Need for Legislation 

The consequences of the U.S. Government failing to make timely 

and complete payment on Treasury debt, that is, a default, could 

be severe. A default could push the country back into recession, 

which would worsen our debt problem, hinder an already stagnant 

economic recovery and threaten our ability to make any of the payments we owe. The legislation removes the risk of default by providing a mechanism to ensure that principal and interest on debt 

obligations are paid. Furthermore, it defines interest so Treasury 

can and must make the interest payments necessary to ensure that 

Social Security benefits can be paid in full. 

C. Legislative History 

Background 

H.R. 807 was introduced on February 25, 2013, and was referred 

to the Committee on Ways and Means. 

Committee Action 

The Committee on Ways and Means marked up the bill on April 

24, 2013, and ordered the bill, as amended, favorably reported. 

Committee Hearings 

The debt limit has been discussed at several Committee hearings 

during the 113th Congress. The Committee held a January 22, 

2013 ‘‘Hearing on the Debt Limit,’’ which examined the Congress’s 

borrowing power and operation of the debt limit. Additionally, the 


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1 U.S. Const., art. 1, § 8, cl. 1–2, 5. 

Oversight Subcommittee held an April 10, 2013 hearing, ‘‘Examining the Government’s Ability to Continue Operations When at 

the Statutory Debt Limit,’’ which reviewed the government’s ability 

to prioritize its obligations and continue operations should the U.S. 

Treasury reach its statutory debt limit and exhaust extraordinary 

measures. 

II. EXPLANATION OF THE BILL

Present Law 

The Constitution grants Congress sole authority over the fiscal 

powers to tax, spend and borrow: 

The Congress shall have Power to lay and collect Taxes, 

Duties, Imposts, and Excises, to pay the Debts and provide 

for the common Defense and general Welfare of the United 

States . . . To borrow Money on the credit of the United 

States.1

Congress exercises its borrowing authority by placing restrictions 

on public debt. Until World War I, Congress typically authorized 

limited amounts of debt, with defined maturity and redemption 

terms, for specific projects. Upon America’s entry into World War 

I, Congress passed the Second Liberty Bond Act of 1917 to ensure 

liquidity necessary to meet obligations as presented. The Act delegated control over day-to-day borrowing activity, subject to various 

limitations to the Executive branch. In 1939, Congress enacted legislation creating the first aggregate debt limit, then $45 billion. 

It is important to note that because the power to borrow resides 

in Congress, the debt limit is not actually a limitation on the executive’s power to borrow. Instead, the statute containing the debt 

ceiling is a grant of authority to the President that he would not 

otherwise have. When that authority runs out, it is the Constitution that prevents the President from attempting to borrow on the 

credit of the United States. 

The current debt limit is $16.4 trillion. This consists of both debt 

held by the public and debt held by the government, both carrying 

the full faith and credit guarantee. Debt held by the public consists 

of securities the Treasury Department has issued to investors, and 

currently amounts to $11.5 billion. The balance is debt held by the 

government in the form of non-marketable Treasury securities, the 

majority of which, $2.7 trillion, is held by the Social Security Trust 

Funds. 

According to the Treasury Department, the U.S. Government 

reached the current debt limit of $16.4 trillion on December 31, 

2012. Since that time, Treasury has employed ‘‘extraordinary measures’’ to avoid exceeding the debt limit. These measures temporarily forestall the need to exceed the ceiling by shuffling funds 

among accounts, as well as suspending certain payments and programs. On January 23, 2013, the U.S. House of Representatives 

passed, and on February 4 President Obama signed into law, a 

temporary debt limit suspension to ensure the complete and timely 

payment of U.S. obligations through May 18, 2013. After this date, 

the aggregate debt limit will be amended to reflect the total 


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amount borrowed, which may lead the Department of Treasury to 

again utilize extraordinary measures. 

Reasons for Change 

To permanently end the risk of the United States experiencing 

a sovereign default and ensure that the Social Security Trust 

Funds can be accessed to pay full benefits while the debt limit is 

reached, it is necessary to require the Treasury Secretary to roll 

over existing debt and honor principal and interest commitments 

by issuing debt outside of the limit solely for these purposes. 

Explanation of Provision 

The provision provides that in the event the debt of the United 

States Government reaches the statutory limit, the Treasury Secretary shall issue debt to the extent necessary to pay principal and 

interest on certain obligations as defined. Obligations for which 

debt shall be issued are limited to those obligations held by the 

public or the Social Security Trust Funds. Obligations issued pursuant to this authority are exempt from the statutory debt limit. 

Section 2 also requires a weekly report from the Treasury Secretary if authority under subsection 2(a) is exercised that accounts 

for obligations due and amounts issued. 

Effective Date 

The provision becomes effective upon enactment. 

III. VOTES OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statements are made concerning the votes of the Committee on Ways and Means in its consideration of the bill, H.R. 807. 

The bill, ‘‘H.R. 807, the Full Faith and Credit Act,’’ was ordered 

favorably reported as amended to the House of Representatives by 

a roll call vote of 22 yeas to 14 nays (with a quorum being present). 

The vote was as follows: 

Votes of the Committee 

In compliance with the Rules of the House of Representatives, 

the following statement is made concerning the vote of the Committee on Ways and Means during the markup consideration of 

H.R. 807 ‘‘Full and Faith and Credit Act.’’ 

The bill, H.R. 807, was ordered favorably reported, as amended, 

to the House of Representatives by a roll call vote of 22 yeas to 14 

nays (with a quorum being present). The vote was as follows: 

Representative Yea Nay Present Representative Yea Nay Present 

Mr. Camp .............................. X ........... ............. Mr. Levin .............................. ........... X .............

Mr. Johnson ........................... X ........... ............. Mr. Rangel ........................... ........... X .............

Mr. Brady .............................. X ........... ............. Mr. McDermott ..................... ........... X .............

Mr. Ryan ............................... X ........... ............. Mr. Lewis .............................. ........... X .............

Mr. Nunes ............................. X ........... ............. Mr. Neal ............................... ........... ........... .............

Mr. Tiberi .............................. X ........... ............. Mr. Becerra .......................... ........... X .............

Mr. Reichert .......................... X ........... ............. Mr. Doggett .......................... ........... X .............

Mr. Boustany ......................... X ........... ............. Mr. Thompson ...................... ........... X .............

Mr. Roskam ........................... X ........... ............. Mr. Larson ............................ ........... X .............

Mr. Gerlach ........................... X ........... ............. Mr. Blumenauer ................... ........... ........... .............

Mr. Price ............................... X ........... ............. Mr. Kind ............................... ........... X .............


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Representative Yea Nay Present Representative Yea Nay Present 

Mr. Buchanan ....................... X ........... ............. Mr. Pascrell .......................... ........... X .............

Mr. Smith .............................. ........... ........... ............. Mr. Crowley .......................... ........... X .............

Mr. Schock ............................ X ........... ............. Ms. Schwartz ........................ ........... X .............

Ms. Jenkins ........................... X ........... ............. Mr. Davis .............................. ........... X .............

Mr. Paulsen ........................... X ........... ............. Ms. Sanchez ......................... ........... X .............

Mr. Marchant ........................ X ........... .............

Ms. Black .............................. X ........... .............

Mr. Reed ............................... X ........... .............

Mr. Young ............................. X ........... .............

Mr. Kelly ................................ X ........... .............

Mr. Griffin ............................. X ........... .............

Mr. Renacci ........................... X ........... .............

Votes on Amendments 

The vote on the amendment by Mr. Ryan to the amendment in 

the nature of a substitute, which clarifies the exemption of new obligations applies solely to any incremental debt issued that is in excess of debt subject to the limit, preventing Treasury from using 

the new authority to borrow money for new spending, was agreed 

to by a voice vote. 

IV. BUDGET EFFECTS OF THE BILL

A. Committee Estimate of Budgetary Effects 

In compliance with clause 3(d) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the revenue provisions of the 

bill, H.R. 807 as reported: The Committee agrees with the estimates prepared by the Congressional Budget Office (CBO), which 

are included below. 

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority 

The bill as reported is in compliance with clause 3(c)(2) of rule 

XIII of the Rules of the House of Representatives. Further, the bill 

involves no new or increased tax expenditures. 

C. Cost Estimate Prepared by the Congressional Budget Office 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the following statement by CBO is provided. 

CBO estimates that enacting H.R. 807, by itself, would result in 

no costs or savings to the federal government because it would not 

change any of the government’s tax or spending policies. Therefore, 

pay-as-you-go procedures do not apply. In addition, CBO estimates 

that the bill would not significantly add to the Treasury’s administrative costs. 


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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, April 26, 2013. 

Hon. DAVE CAMP, 

Chairman, Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 807, the Full Faith and 

Credit Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Jared Brewster. 

Sincerely, 

ROBERT A. SUNSHINE

(For Douglas W. Elmendorf, Director). 

Enclosure. 

H.R. 807—Full Faith and Credit Act 

H.R. 807 would allow the Department of the Treasury to issue 

debt to pay principal and interest on debt held by the public and 

debt held by the Old-Age and Survivors Insurance Trust Fund and 

Disability Insurance Trust Fund, if the statutory limit on debt is 

reached. The bill would require the Treasury to provide a weekly 

report to the House Committee on Ways and Means and Senate 

Committee on Finance outlining the exempted transactions until a 

new debt limit is enacted. 

CBO estimates that enacting H.R. 807, by itself, would result in 

no costs or savings to the federal government because it would not 

change any of the government’s tax or spending policies. Therefore, 

pay-as-you-go procedures do not apply. In addition, CBO estimates 

that the bill would not significantly add to the Treasury’s administrative costs. 

H.R. 807 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

The CBO staff contact for this estimate is Jared Brewster. This 

estimate was approved by Peter H. Fontaine, Assistant Director for 

Budget Analysis. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE

HOUSE OF REPRESENTATIVES

A. Committee Oversight Findings and Recommendations 

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives (relating to oversight findings), the Committee concluded that it was appropriate and timely to enact the 

sections included in the bill, as reported. Under the No Budget No 

Pay Act, the debt limit will reset on May 19, after which Treasury 

is likely to again use extraordinary measures and new borrowing 

will be prohibited. Without the new authority, the U.S. could risk 

defaulting on its debt and the consequences of a U.S. default on a 

debt payment could be very serious. At the very least it would 

hinder an already stagnant economic recovery, and, in a worst-case 

scenario, lead the country back into a recession. Failure to make 

a debt payment will increase our borrowing costs and threaten our 

ability to make any of the other payments we owe. If signed into 

law, this legislation would prevent such an unacceptable situation. 


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The legislation removes the risk of default and provides transparency to ensure the Congress can hold the Executive Branch accountable when using the new authority. 

B. Statement of General Performance Goals and Objectives 

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill contains no measure that authorizes new or additional funding compared with the current law baseline, so no statement of general 

performance goals and objectives for which any measure authorizes 

funding is required. 

C. Duplication of Federal Programs 

No provision of H.R. 807, the ‘‘Full Faith and Credit Act,’’ establishes or reauthorizes a program of the Federal Government known 

to be duplicative of another Federal program, a program that was 

included in any report from the Government Accountability Office 

to Congress pursuant to section 21 of Public Law 111–139, or a 

program related to a program identified in the most recent Catalog 

of Federal Domestic Assistance. 

D. Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 807 specifically directs no 

specific rule makings within the meaning of 5 U.S.C. 551 to be 

completed. 

E. Information Relating to Unfunded Mandates 

This information is provided in accordance with section 423 of 

the Unfunded Mandates Act of 1995 (Pub. L. No. 104–4). 

The bill does not impose a Federal mandate on the private sector. The bill does not impose a Federal intergovernmental mandate 

on State, local, or tribal governments. 

F. Applicability of House Rule XXI 5(b) 

Clause 5(b) of rule XXI of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, 

or conference report carrying a Federal income tax rate increase 

may not be considered as passed or agreed to unless so determined 

by a vote of not less than three-fifths of the Members voting, a 

quorum being present.’’ The Committee has carefully reviewed the 

sections of the bill, and states that the bill does not involve any 

Federal income tax rate increases within the meaning of the rule. 

G. Congressional Earmarks, Limited Tax Benefits, and Limited 

Tariff Benefits 

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill, and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

H.R. 807 makes no changes to current law. 


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VII. DISSENTING VIEWS 

The Democratic Members of the Committee strongly oppose this 

legislation, which is simply a plan to default on the full faith and 

credit of the United States. We are further concerned that just by 

entertaining the idea that the United States will no longer pay all 

of its bills on time and in full, the Majority is damaging our reputation and our economic recovery. Rather than continuing to play 

with fire on the economy, we urge the Majority to stop blocking a 

conference on the budget so that the House and Senate can sit 

down on a bipartisan basis and work to get our fiscal house in 

order. 

This legislation would require the Department of the Treasury to 

pay Chinese and other foreign bondholders first, before our troops 

in harm’s way if they are paid at all, before the doctors and hospitals that care for our seniors on Medicare if they are paid at all, 

before our veterans if they are paid, and before our American small 

businesses if they are paid. Let us be clear—under this legislation, 

the United States would no longer pay all of its bills on time and 

in full, and American families would pay the price. 

That is reckless and indefensible. The Department of the Treasury and other experts have also said it is impossible. Treasury pays 

80 to 100 million bills a month and its computer system is designed 

to pay the bills in the order they come in. It has no way to 

‘‘prioritize’’ some legal obligations of the United States over others. 

Economists across the political spectrum have warned that to default would do catastrophic damage to our economy. To put it in 

context, the short-term reduction in federal spending and the resulting fiscal shock from a default would be about 21⁄2 times as 

large as the contraction that would have been caused by the recent 

‘‘fiscal cliff.’’ At our Ways and Means hearings on this topic, MIT 

Economist Simon Johnson warned that a default could reduce GDP 

by 20 to 30 percent and double the unemployment rate. 

Apparently proponents of this legislation have forgotten that the 

last time Republicans turned our nation toward default, in the 

summer of 2011, the damage was serious and lasting. 

• Aug. 2011 was the single worst month for job creation in the 

last three years. 

• The Dow Jones Industrial Average plunged 2,000 points in 

July and August of 2011. 

• The Treasury was forced to spend $1.3 billion more in interest 

payments, according to a Government Accountability Office estimate. The Bipartisan Policy Center estimates the higher costs will 

be almost $19 billion over the next decade. 


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• And of course, who could forget that the U.S. credit rating was 

downgraded for the first time in our history. 

We want to be clear: prioritization by any name is default. We 

oppose this legislation and urge our Republican colleagues to avoid 

repeating their mistakes. 

SANDER LEVIN. 

Æ 


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