WASHINGTON -- House Speaker John Boehner (R-Ohio) on Tuesday essentially agreed with Democrats' arguments that a Republican bill to prioritize debt payments would put China before U.S. troops -- except he suggested that would be a good thing.
During an interview with Bloomberg TV, Boehner was asked about this week's vote on the Full Faith and Credit Act, which, in the event that the U.S hits its debt ceiling, would direct the treasury secretary to pay only the principal and interest owed to bondholders before making any other payments. Money for other payments, such as those for veterans, Medicare and national security, would have to be divvied up from what remained of the scarce federal funds.
Republican supporters of the bill maintain that the most important thing is that the nation won't default on its credit as as long as those interest payments are made on time.
"Our goal here is to get ourselves on a sustainable path from a fiscal standpoint," Boehner said. "I think doing a debt prioritization bill makes it clear to our bondholders that we’re going to meet our obligations."
When show host Peter Cook asked if Boehner's comments mean that, as Democrats have suggested, Republicans are basically choosing to pay China before paying U.S. troops, Boehner didn't disagree.
"Listen. Those who have loaned us money, like in any other proceeding, if you will, court proceeding, the bondholders usually get paid first. Same thing here," Boehner said. Notably, the description of a court proceeding where bondholders get paid first is not just any court proceeding. It's a bankruptcy court proceeding.
Boehner also brushed off the idea that he may be worried about the politics of the issue.
"No. Not at all," Boehner said. "I just think it's another tool that we can use to help impress upon the administration. If it comes to the point where they don’t have enough money to pay all the bills, here is some order that we think is sound."
The White House threatened to veto the bill earlier Tuesday, calling it an "unwise, unworkable, and unacceptably risky" alternative to simply raising the debt ceiling and paying off obligations.
"American families do not get to choose which bills to pay and which ones not to pay, and the United States Congress cannot either without putting the Nation into default for the first time in its history," read the Statement of Administration Policy. "This bill would threaten the full faith and credit of the United States, cost American jobs, hurt businesses of all sizes, and do damage to the economy."
The U.S isn't expected to hit its debt limit until October, according to recent estimates, which gives Congress and the White House several months to wrestle with the issue, along with other looming fiscal matters.