WASHINGTON -- Rep. Louie Gohmert (R-Texas) accused both the president and House Speaker John Boehner (R-Ohio) of misleading the American people about the need to increase the debt limit by Aug. 2, saying on Wednesday advisers to the president are lying about the urgency of raising the debt ceiling.
"The speaker is getting bad advice," Gohmert said at a press conference. "I guess the problem with the speaker and him saying that [the debt limit needs to be raised by Aug. 2] is that he listened to the president. I'll urge the speaker not to believe the president anymore."
Gohmert, along with Reps. Michele Bachmann (R-Minn.) and Steve King (R-Iowa), introduced a bill on Wednesday that would require the president to pay off interest on the nation's debt first, if the debt limit is not increased by Aug. 2.
The debt limit of $14.29 trillion was reached on May 16, and the Treasury Department estimates that the nation will begin the process of defaulting on its debts Aug. 2, now less than three weeks away.
Lawmakers are meeting daily with the White House to work out a deal to raise the debt ceiling in exchange for major spending cuts -- potentially in the trillions of dollars -- and program reforms.
Under the bill, military service members and veterans would still get their checks on time if debt negotiations went on past the Aug. 2 deadline.
But according to Gohmert, King and Bachmann, the government does not need to raise its debt ceiling by Aug. 2 to continue paying interests on its debts and prevent default, or to continue paying military service members and veterans.
"It's a misnomer that the president has been trying to pass off on the American people," Bachmann said at a press conference for the bill.
Credit ratings agencies have warned they will downgrade the government's credit rating if it begins the process of defaulting on its loans.
But King, calling the president's statements on the debt ceiling "veiled threats, if not an ultimatum," said the nation's credit rating could remain intact even if the debt limit is not increased by Aug. 2, so long as their bill to pay interest on the debt was passed.
"Our credit rating, we're trying to preserve it with this bill," King said. "We want to guarantee our credit rating stays."
None of the three lawmakers responded to questions about who would not be paid should the debt ceiling not be raised by Aug. 2. A failure to raise the debt ceiling could cause a partial government shutdown in which Social Security checks might not be mailed.
But the members of Congress said the threat of shutdown was less important than ensuring major spending cuts as part of the final deal.
"President Obama is holding the full faith and credit of the United States hostage so he can continue his spending spree," Bachmann said. "We're saying, President Obama, is your spending spree that important to you?"
What happens if the U.S. defaults? See the slideshow below.
If the U.S. starts defaulting on its debt, everybody who owns U.S. stocks and bonds will take a big hit. This will affect the big banks, corporations and even countries -- pushing some toward bankruptcy. That's the kind of slide that can spark a panic. On a more personal note, your 401(k) and/or pension will suffer big losses. It could take a long time to rebuild those funds, delaying retirement -- or making it impossible.
Because the global banking system has such a big stake in U.S. assets and the dollar, it will essentially grind to a halt until the U.S. raises the debt limit. At that point, our usual ways of purchasing things -- including credit and loans -- will be unavailable. You can get and use cash, but it will essentially be Monopoly money for a while, due to hyperinflation.
With the global banking system in free-fall, nobody will be lending money for a while. You can't make big-ticket purchases (like a car or college education). And companies that have lost all their U.S. assets won't be able to get loans to cover their day-to-day operations if the commercial paper market -- where companies lend each other money overnight -- seizes up.
When businesses and corporations lose their money and can't get a loan to function, they have to cut somewhere -- and that somewhere could be you. In other cases, planned expansions and new hires might be pushed back, slowing down economic progress.
When the banking system does get back on track, it will still be more expensive and difficult for business owners, the government and regular people to borrow money or buy goods on credit. That drives up the cost of our debt, both personal and the one the government owns. When interest rates go up, the value of bonds you hold in your 401(k) goes down.
Treasury Secretary Tim Geithner warned congressional leaders that failure to raise the debt limit could stop, limit or delay military payments. "This would cause severe hardship to American families," he said, "and raise questions about our ability to defend our national security interests."
Those who rely on Social Security to pay their bills may well need to rely on family or government assistance (if it's still available) to get by. Social Security has a multi-trillion-dollar trust fund that ensures it will be able to pay out benefits for decades. But that trust fund is invested in special Treasury bonds, which will almost certainly plummet in value if the U.S. starts defaulting on other debts. The result could be a major cash crunch for seniors.
As the value of the dollar drops here in the U.S., it will become virtually worthless in other countries. If you're planning a vacation or business travel outside the U.S., it's going to get a lot more expensive.
If the federal government fails to pay the bills associated with Medicare, then hospitals, doctors and other medical service providers will not be paid. This could drive up the costs of health care -- and make it less available to those in need.
If the U.S. stops paying its bills, the rest of the world will get pretty upset. Even after debt repayment eventually restarts, China and Europe will be wary of lending more money to America -- and when they do, it will be at much higher rates.
Slideshow by Mandy Jenkins