IV
104TH CONGRESS
2D SESSION
H. RES. 360
Affirming the support of the House of Representatives for the preservation
of the integrity of the full faith and credit of the United States of America.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 1, 1996
Mr. VENTO (for himself, Mr. SCHUMER, Mr. KANJORSKI, Mr. LAFALCE, Mr.
FLAKE, Mr. KENNEDY
of Massachusetts, Ms. VELA´ZQUEZ, Mrs.
MALONEY, Mr. GUTIERREZ, Mr. WATT of North Carolina, Mr. ACKER-
MAN, Mr. BARRETT of Wisconsin, Mr. BENTSEN, and Mr. FRANK of Mas-
sachusetts) submitted the following resolution; which was referred to the
Committee on Ways and Means
RESOLUTION
Affirming the support of the House of Representatives for
the preservation of the integrity of the full faith and
credit of the United States of America.
Whereas the United States has achieved the most secure and
highest credit rating of any nation;
Whereas the denigration of the full faith and credit of the
United States would have a substantial negative impact
on its citizens if the United States were to default on its
debt obligations;
Whereas there exist no economic impediments which inhibit
the ability of the United States to honor its contractual
obligations to pay the debt and interest;
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Whereas the majority leadership in Congress has issued con-
tradictory political statements regarding an orderly and
rational procedure to increase the debt ceiling to honor
United States debt obligations;
Whereas no legal, prudent or practical tools remain for the
Secretary of the Treasury to prevent default on February
29 or March 1, 1996, unless Congress increases the debt
limit;
Whereas a top credit rating agency, Moody’s Investors Serv-
ices has announced that it is considering downgrading
the credit rating of United States Treasury medium- and
long-term debt obligations because the current political
threats and debate over the budget and the debt ceiling
have significantly increased the risk of default on certain
Treasury obligations;
Whereas if the United States were to default on its debt the
Federal Government would not be able to make $30 bil-
lion of Social Security (representing 43 million Social Se-
curity beneficiaries and 4 million SSI beneficiaries) and
other benefit payments;
Whereas if the United States were to default on its debt the
Federal Government would not be able to make over $1.5
billion in veterans benefits payments (representing 2.2
million veterans with service-connected disabilities, more
than 300,000 survivors of veterans, and nearly three-
quarters of a million poor war-time veterans and survi-
vors);
Whereas if the United States were to default on its debt the
over 1,500,000 active duty military personnel of the
Army, Navy, Air Force, and Marines, including our
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troops in Bosnia, would not be paid for their service to
the United States;
Whereas if the United States were to default on its debt the
cost of home mortgages, home equity loans, student
loans, and all consumer debt linked to Treasury securities
will permanently increase at least one-quarter to a full
percentage point;
Whereas if the United States were to default on its debt the
cost of an average student loan would rise by $850 over
its life if rates on Treasury securities increased by one-
half a percentage point;
Whereas if the United States were to default on its debt the
average homeowner with a $100,000 ARM at 7.25 per-
cent rate of interest, would pay an additional $840 per
year ($70 a month) if rates on Treasury securities in-
creased by one percent;
Whereas if the United States were to default on its debt the
American taxpayers would pay an additional $90 billion
in interest over seven years, and pension funds would lose
$40 billion in the value of assets needed to pay retiree
benefits with just a one-half percentage point increase in
interest rates;
Whereas if the United States were to default on its debt the
value of real estate, pension funds, and other savings will
drop;
Whereas the denigration of the full faith and credit of the
United States and the sanctity of United States debt in-
struments would create an economic shock wave and have
a substantial negative impact on the domestic and inter-
national economy if the United States were to default on
its debt obligations;
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Whereas if the United States were to default on its debt it
would result in a significant and permanent increase in
Federal borrowing costs thereby increasing the Federal
deficit and hindering efforts to balance the Federal budg-
et;
Whereas if the United States were to default on its debt it
would substantially increase the costs of borrowing to
State and local government;
Whereas if the United States were to default on its debt
(dropping its rating to at best a ‘‘C’’) it is uncertain
when United States debt obligations would regain their
‘‘AAA’’ status even once debt service resumes; and
Whereas this Nation, the United States of America, through-
out its two hundred year history, including the Civil War,
World War I, World War II, and the Great Depression,
has never once defaulted on its debt: Now, therefore, be
it
Resolved, That the House of Representatives should
immediately enact an increase in the debt limit free of con-
ditions.
Be it further resolved, That the House of Representa-
tives affirms its continued unequivocal support for the full
faith and credit of the United States of America, and, that
the threat of default should never be employed, issued or
in any way implied in political policy debates in such a
manner as would jeopardize the credit rating of the United
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States of America by casting doubt on whether the United
States will honor its debts.
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