GOP: Constitutional Debt Ban Is Price Of Debt Ceiling Hike
WASHINGTON -- Archconservative Rep. Jim Jordan (R-S.C.) on Sunday dismissed warnings from financial professionals that failing to raise the debt ceiling could spark a financial calamity, claiming that the economy is far more threatened by increasing federal debt levels.
"Everyone understands that in two to three years we're going to have a debt crisis," Jordan said on "Fox News Sunday." "The big crisis that's coming, that's more important than anything that's happening now."
The sustainability of U.S. debt is measured by interest rates on Treasury bonds. If investors are concerned about the government's capacity to repay its debts, they demand higher interest rates to compensate them for their increased risk. But interest rates on Treasury bonds have been at historic lows for years -- indicating a high level of confidence in the government's ability to handle its spending levels. Markets have only grown skittish about the government's capacity to handle its debt in recent weeks, as politicians have been unable to reach an agreement to raise the debt ceiling and avoid default.
"Interest rates are at historic lows, it's not the problem," Fox commentator Juan Williams noted later in the show.
Jordan, who chairs the hardline conservative Republican Study Committee, was one of multiple GOP politicians on the Sunday talk shows touting a Constitutional amendment to require the government to balance its budget as a condition of raising the debt limit. Rep. Chris Van Hollen (D-Md.) openly mocked the proposal, calling it an attempt to write radical GOP policy priorities, including Medicare and Medicaid cuts, into the Constitution. Sen. Lindsay Graham (R-S.C.) echoed Jordan's call for a balanced budget amendment on CNN's "State of the Union," as did Sen. Jim DeMint (R-S.C.) on NBC's "Meet The Press."
Jordan acknowledged that the amendment proposal reflected Republican budget proposals. "Basically it mirrors the budget proposal that the House passed this year," Jordan said on Fox.
Van Hollen also castigated the GOP for refusing to consider closing corporate tax loopholes as part of the debt deal.
"If you're not even going to talk about ending the subsidies for oil and gas companies, where do you go?" Van Hollen asked.