Republican lawmakers are pushing President Obama to put seniors, troops, and bondholders at the front of the line should Congress fail to raise the debt ceiling. The rest? Well, that’s up to him.“We’re just calling on the president to assume the role of CEO and prioritize accordingly,” Rep. Rick Crawford (R-AR) said at a press conference on the issue. Participants repeatedly accused Obama of trying to “scare seniors” by suggesting Social Security payments might be suspended in the wake of a default crisis.
One reporter shouted a question as to whether things like, say, keeping criminals in federal prisons or securing the border might also be added to the list.
“They’re all priorities,” Rep. Louie Gohmert (R-TX). “As our colleagues here have said, we need to keep our promises and the money is there to do that.”
But where will the immediate 44% cut in overall spending needed to avoid default come from instead? Michele Bachmann, who has gone so far as to demand the debt ceiling never be raised, dodged questions on the issue Wednesday by simply repeating her assertion that Social Security and troop pay be left sacrosanct.
Asked by TPM about what areas might need to be cut offset their proposed guarantees, Rep. Nan Hayworth (R-NY) offered a similar response, repeating that Social Security, Medicare, military pay, and veterans’ benefits should all be off limits. Pressed to name any savings — furloughing federal employees, shutting down various agencies — that might be preferable, she said her focus was only on calling out Obama’s threats.
“We’re not targeting any of those things,” she said. “We’re not scheming on the House side to somehow have a menu of things that are going to happen when the inevitable denouement occurs.”
The basic Republican claim that the White House has the ability to neatly prioritize spending is heavily disputed, and not only by the Treasury Department. A recent study by the Bipartisan Policy Commission concluded that “handling all payments for important and popular programs (e.g., Social Security, Medicare, Medicaid, defense, active duty pay) will quickly become impossible” and the reality would instead be “chaotic.”
Some Republicans at Thursday’s presser at least tried to offer up a few creative possibilities to close the gap, however vague. Gohmert suggested using TARP funds. Rep. Bill Huizenga (R-MI) acknowledged to TPM there would need to be a partial government shutdown, but said the Fed could sell back Treasury bonds that it acquired as part of its latest round of quantitative easing.
Of course, Huizenga’s idea assumes anyone would want to buy those bonds in the middle of a debt crisis that directly affects them. Huizenga said he believed the market would remain stable so long as the US kept making interest payments, but ratings agencies have made suggested that they will downgrade US debt regardless of whether this occurs.
As for the TARP proposal, budget expert Stan Collender dismissed it as “a joke,” since it would still require the government to borrow new funds — which they can’t do without raising the debt ceiling.
“There may be unused spending authority under TARP, but there’s no drawer with cash that’s been put aside for that purpose,” he said in an e-mail.