Has the Tea Party been listening to too many late night infomercials? (“Bad credit? No credit? No problem!”) There is no other explanation for the way some of the far right wing’s most vocal figureheads are claiming that really, the federal government defaulting on its debt might not be such a bad idea after all.
The Republican Party has traditionally made “kitchen table economics” a key talking point in their push for fiscal responsibility. The government must be run like a family’s budget, they claim, arguing that when the expenses are greater than your income, it’s time to make the hard cuts.
Indeed, that’s how it should and does work for many American families, especially when things get tight. But most families also recognize that when it comes to the essentials, if you bought it, you have to pay for it. If the option is opening just one more credit card or finding a short-term loan versus losing the house or the car, you look to credit, knowing that without the home or car your options for earning more become exponentially bleak.
It’s a solution that even the GOP can usually recognize is beneficial in the long run, and it’s the reason why the debt ceiling has been raised 45 times since President Reagan was in office, all with bipartisan support and most of them with absolutely no concessions or negotiations.
So what has changed? The Tea Party, of course. A radical group of extremists groomed on the Grover Norquist idiom that “government should be small enough to drown in a bathtub,” the faction came into power at a time when the biggest qualification for running for Congress was having absolutely no legislative experience. They ran on a platform of dismantling the government and, now that they see their opportunity, they aren’t intending to let a little thing like default or the collapse of the American economy stop them. And they are being egged on by some major supporters.
“Don’t let Obama lie to you: even MOODY’S says U.S. will NOT default if debt ceiling is not raised,” tweeted Bryan Fischer of the American Family Association, a fundamentalist right-wing Christian organization that organizes “values voters.” Moody’s actually says that as long as the government pays all the interest and principal there would be no risk of its credit rating being affected – which essentially assumes that the government will be able to meet those financial requirements, and would thereby not default. The Department of Treasury states that this strategy would be unlikely to work for more than a few days.
Far-right spokespeople like Fischer have been goading lawmakers into a game of chicken over default, and it’s one that members of Congress are more than willing to embrace. “I think, personally, it would bring stability to the world markets,” said Rep. Ted Yoho (R-Florida), who argued that refusing to raise the ceiling would show the U.S. was serious about addressing its debt.
Sen. Tom Coburn (R-Oklahoma), meanwhile, claims that “There’s no such thing as a debt ceiling” – based on a Philosophy 101-style argument that if a debt ceiling is constantly raised, is it really even a ceiling? (Whoa, dude. Deep.)
“We have 10 times as much tax revenue as we’ve got annual interest on the debt obligations,” Rep. Mo Brooks (R-Alabama) told Politico. “So if the president does not want us to default on our credit or obligations, we won’t.”
“We are not going to default on the public debt. That doesn’t mean that we have to pay every bill the day it comes in,” Rep. Joe Barton (R-Texas) told CNBC.
So what bills would Rep. Barton and other GOP legislators pay? Priority would be given to Social Security checks and bond payments. Everything else would just have to wait.
The situation might not be immediately dire. The House majority, led by Speaker John Boehner (R-Ohio) has proposed a six-week limit increase to allow more time for negotiations over the biggest sticking point of the government shutdown – defunding Obamacare. That the idea has sprung up shortly after Koch Industries, a major Tea Party funder, has said it does not want to see a default is surely just a coincidence.
Democrats and the administration haven’t agreed to the new terms yet, saying they would like a deal that reopens the government at the same time, but the talks have been labeled “good.”
On the one hand, an extension provides more wiggle room to deal with the potential economic collapse that could occur if the U.S. does fail to make payments on its loans. On the other, the proposal explicitly forbids the Treasury from taking “extraordinary measures” to continue making payments after the government hits that ceiling.
For the Tea Party this new wrinkle could seriously hamper their messaging machine – which relies on the idea that default won’t be that bad because the government will just pay some interest to keep the credit rating from tanking.
The “compromise” could be just as bad for those who hope to see the shutdown end. Kicking the debt ceiling fight down the road removes the urgency from passing a clean continuing resolution and getting the government fully running as soon as possible. For those who rely on the government for their salary, pension payments, social security, Head Start, WIC, veterans benefits, enrollment for small business loans, getting into clinical trials to cure diseases, having foodborne illnesses tracked or any other number of functions, six more weeks means the juggling of their own finances and decisions on which bills can be paid.
Unfortunately, unlike the government, everyday Americans can’t use funding gimmicks to keep their creditors at bay.