POLITICS
08/08/2013 02:16 pm ET Updated Aug 08, 2013

Ted Yoho On Debt Ceiling: 'Credit Rating Would Do Better' With Default

WASHINGTON -- As Congress braces for another debt-ceiling fight, Rep. Ted Yoho (R-Fla.) told constituents the nation's credit rating would actually be better if the United States defaulted on its debt.

Speaking at a town hall Monday in Orange Park, Fla., Yoho, who recently made news for calling an Obamacare tanning tax "racist" and expressing support for the birther movement, was asked about his position on raising the nation's borrowing limit. He said he would not vote in favor of a debt ceiling increase, a response that was met with applause.

The Florida Republican and tea partier went on to explain that only a few business owners have told him it's imperative for the government to pay its bills, then he argued that the country would benefit from a "major reset." From a recording provided by someone who attended the town hall, but wanted to remain anonymous because they recorded it without permission:

Two years, five years from now we're gonna say the same thing ... And it's going to happen over and over again. It's like groundhog day, it's a bad movie. And they said, "What's your great plan?" And I'll probably get in trouble, beat up in the paper over this ... I say, You know what, I know we need the money, and I'm gonna pay it, I'm just not paying you today, and we'll pay you with interest, but we need to do a major reset and look at us internally, and say we can't afford this ...

… And so they say that would rock the market, capital would leave, the stock market would crash, interest rates would go up. I said, "Let me give you my feeling: Interest rates are gonna go up anyways. They went up the last time they raised the debt ceiling, interest rates went up ... because we're not dealing with the problem. We're putting another Tylenol to the problem. And that's not [an ad] for Tylenol." So let's just address the problem, and I think if we address it, I think the creditors that we owe money to around the world would say, "you know what, they're getting their house in order." And I think our credit rating would do better, if we did that than face the mass [sic] program we've been up to ... There are several of us that we're not raising the debt ceiling; don't ask us. We don't have a money problem, we have a spending problem.

Yoho spokesman Omar Raschid said Thursday that the recording is consistent with the representative's message.

Yoho's position is no surprise -- he was one of 33 Republicans who voted against the short-term debt limit extension that passed the House of Representatives in January. At the time, the congressman defended his vote by simply noting the government needed to be held accountable for its spending levels.

But Yoho's latest comments put him in the category of default deniers -- lawmakers who reject the idea that a failure to raise the debt limit would lead to economic catastrophe. Economists have long warned, however, that the consequences of default are far more severe. They include a delay in Social Security checks and veterans' benefits, collapse in prices for Treasury bonds resulting in record high interest rates, and a stock market plunge that could trigger a recession. When partisan bickering led to an impasse over raising the debt ceiling in 2011, the U.S. credit rating was downgraded by rating agency Standard & Poor's.

Most Americans also fear economic calamity if Congress fails to raise the borrowing limit, according to polling. House Republicans have nonetheless foreshadowed a battle this fall, with House Speaker John Boehner (R-Ohio) insisting on spending cuts in exchange for a debt-limit increase.

The White House has maintained that President Barack Obama will not negotiate on the subject.

In recent weeks, Obama has embarked on a campaign-like tour to refocus the debate on the economy and rally the country around his policy proposals ahead of budget negotiations in September. At multiple stops throughout the country, the president has accused House Republicans of "constant gridlock" and called on them to abandon threats to shut down the government or toy with default.

"We’ve seen a sizable group of Republican lawmakers suggest they wouldn’t vote to pay the very bills that Congress rang up -- a fiasco that harmed a fragile recovery in 2011, and one we can’t afford to repeat," Obama said in July. "Then, rather than reduce our deficits with a scalpel -- by cutting programs we don’t need, fixing ones we do, and making government more efficient -- this same group has insisted on leaving in place a meat cleaver called the sequester that has cost jobs, harmed growth, hurt our military, and gutted investments in American education and scientific and medical research that we need to make this country a magnet for good jobs."

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