Democrats: No pay for lawmakers if U.S. defaults

@CNNMoney May 31, 2011: 1:27 PM ET

NEW YORK (CNNMoney) -- Raise the debt ceiling or don't get paid.

That's essentially what Senate Democrats are saying in the latest act of political theater surrounding the nation's debt ceiling.

Sens. Barbara Boxer and Bob Casey sent a letter to Treasury Secretary Tim Geithner on Tuesday, urging him to include lawmaker compensation in the list of things he will have to stop paying if Congress fails to raise the debt ceiling by Aug. 2.

"There is no reason that members of Congress and the president should be free from the pain that would be felt by our nation if the government were to default on its obligations," the letter states. "If we cannot do our jobs and protect the full faith and credit of the United States, we should not get paid."

The federal government officially hit its spending limit earlier this month, and while Congress has routinely raised the debt ceiling in the past, this time it won't come without a struggle.

Debt ceiling talks: How to cut $1 trillion

Republicans argue that raising the debt ceiling is irresponsible, since the nation already owes trillions of dollars and the government is operating at a deficit.

But Democrats say the government will not be able to pay its bills and could be at risk of a default if the debt ceiling is not raised. Geithner has said that the results would be "catastrophic."

While the stakes are potentially very high, experts say it's difficult to know exactly what would happen if the debt ceiling is not raised, since that has never happened before.

In their letter, Boxer and Casey acknowledge that the debt and deficit are out of control, but they argue that, in this case, "we must not play politics with the full faith and credit of the United States."

The senators also took issue with comments from an unspecified Republican lawmaker, who suggested that the U.S. economy could benefit from a default.

"We strongly disagree with this statement and wonder whether this member, and others who have made similar statements, would feel differently if they weren't receiving paychecks while the government defaults on its obligations," the letter states.

The letter points out that the Senate has already passed a bill to freeze lawmaker pay in the event of a default. But the legislation has been held up in the Republican-dominated House, according to the letter.

Treasury did not immediately respond to a request for comment. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.43%4.46%
15 yr fixed3.89%3.89%
5/1 ARM4.22%4.14%
30 yr refi4.43%4.45%
15 yr refi3.87%3.88%
Rate data provided
View rates in your area
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->