The Government Shutdown

10.07.13

The GOP’s Top 10 Debt Ceiling Denialists

A clique of GOP lawmakers say the debt ceiling crisis is a hoax. They could tank the economy and make a deal impossible, writes Patricia Murphy.

Worried about the looming debt ceiling crisis and possible default of the nation’s debt? Don’t be! According to more than a few GOP lawmakers, conservative donors, and Tea Party activists, the nation’s debt ceiling doesn’t really exist and the chances of a default on the United States’ sovereign debt lie somewhere between unlikely and impossible.

The default-is-a-hoax sentiment inside conservative circles is real and could have serious ramifications for the economy as a whole. While House Speaker John Boehner continues his hunt for enough votes just to re-open the federal government, the growing chorus of default deniers in the House and Senate could make striking a deal to increase the debt ceiling this month next to impossible.

Below are 10 of the latest naysayers:

1. Sen. Pat Toomey (R-Penn.):  “No treasury secretary or president would actually default on the debt, even if they couldn’t borrow more money.”

2. Sen. Tom Coburn (R-OK):  “I would dispel the rumor that is going around that you hear on every newscast that if we don’t raise the debt ceiling we will default on our debt. We won’t.”

3. Sen. Rand Paul (R-KY):  “If you don’t raise the debt ceiling that means you won’t have a balanced budget, it doesn’t mean you wouldn’t pay your bills.”

4. GOP mega-donor Foster Friess:  “It’s impossible to default on the debt—-years down the road, maybe.”

5. Rep. Jason Chaffetz (R-Utah):  “We collect money every day; it just depends on how you spend it.”

6. Tea Party Patriots: “Is hitting the debt ceiling ideal? No, of course not, which is why Tea Party Patriots has long demanded Congress be responsible and balance the budget instead of raising the ceiling. But it’s also not something that will cause a default.”

7. Sen. Ted Cruz (R-Tex.):  “Will the U.S. default on its debt?…The answer is of course not.’”

8. RedState.com:  “Obama’s Treasury Department could still pay our debt even without a debt ceiling deal.”

9. Rep. Mick Mulvaney (R-SC):  “We’re not going to default; there is no default.”

10. Rep. Ted Yoho, large-animal veterinarian-turned-Congressman (R-FL): “I’m not going to raise the debt ceiling…I think, personally, it would bring stability to the world markets.”

David Walker, the former comptroller general under President Bill Clinton, who also served under President George W. Bush, says emphatically that the United States should not violate the debt ceiling limit, but he agrees with Republicans that the United States could and should prioritize making interest payments and bond redemptions ahead of other obligations. But, Walker says, the Treasury Department is either unable or unwilling to do that.

“In theory you could prioritize your payments. And in theory, if your accounting system were adequate, you could use whatever cash you have to be able to pay interest on the debt as a top priority,” Walker says. “The problem is that the federal government’s accounting systems are so bad that they don’t have enough transparency to be able to differentiate the payments.”

Like all partisan arguments these days, Walker says the current debate over the debt ceiling is glossing over both the seriousness of the United States’ overall debt load and the real-world consequences of not raising the debt ceiling, including an imminent failure to pay Social Security recipients as early as November.

“Unlike the continuing resolution, the debt ceiling is much more significant,” Walker warns. “You would have to suspend payments, you would have to do things that would be felt.” Among the things that would be felt, Walker says, are Social Security disability payments, scheduled for November 1, and retirees’ payments, which are scheduled for November 13. “Not having 35 to 40 million payments go out on time, believe me, that is not an acceptable outcome.”