Over at Slate, Dave Weigel profiles the strangest subset of the debt ceiling hostage-taker caucus -- the members of the House GOP who seem to genuinely believe that breaching the debt ceiling would be no big deal, and that everyone warning of dire economic consequences is either wrong or weaving elaborate conspiracies.
In general, the people Weigel profiles fit into a specific camp -- one that believes that the Treasury has more leeway to prioritize payments than they are letting on, and that by carefully making choices, the government can keep paying bills for a long time after the debt ceiling is breached. Per Weigel:
The theory goes like this. Several times, Republicans have passed (or endorsed) the Full Faith and Credit Act to assure investors that the country won’t default. Just like Obama should be moving around money to keep the parks open, he should be telling investors that he can use incoming revenue to avert a default by paying debt service, entitlements, and the military.
Anything less, according to frequent Full Faith and Credit Act sponsor Sen. Pat Toomey, is a “scare tactic.” House Republicans who voted for that act insist that the president’s going to be able to finance the debt and keep old people alive—unless he’s so vindictive that he doesn’t want to. “Social Security benefits are funded by mandatory spending,” explained Texas Rep. Bill Flores to a reporter in his district. “They go out come heck or high water. The only way Social Security payments could be withheld is if two things happen. One is the president decides to withhold them, or two, he takes the staff away that generates those payments or checks that go out the door.”
But as Brad Plumer notes, the Treasury's view is that it cannot prioritize payments in this fashion, primarily because the Treasury processes payments with computer systems that are programmed to "make each payment in the order it comes due."
Under this view, if Congress fails to lift the debt ceiling, the U.S. government will only have money to cover about 65 percent of its bills. Some payments will simply fail to clear. Perhaps a payment to a defense contractor comes up short. Maybe a Social Security check bounces. Maybe an interest payment to bondholders fails.
That last possibility is the most worrisome. If the U.S. government misses a payment to bondholders, the consequences could be severe. "A default would be unprecedented and has the potential to be catastrophic," warns Treasury. "Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse."
That leads us to a second camp of debt ceiling deniers: the ones that truly believe that all this talk of default is just not true, prioritization or no, and that nothing is at stake with regards to the global economy. This camp includes people like Sen. Tom Coburn (R-Okla.), who told "CBS This Morning," "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.” There's also Senator Ted Cruz (R-Texas), who says, “Will the U.S. default on its debt? ... The answer is of course not.”
And Rep. Ted Yoho
(R-Texas) (R-Fla.) truly exists in a world of his own. He won't vote to raise the debt ceiling, because, as the Washington Post reports, he thinks "'it would bring stability to the world markets,' since they would be assured that the United States had moved decisively to curb its debt."
But what makes all of this truly surreal isn't just the fact that some of these people believe that there are no consequences to a debt ceiling breach. It's that all of these people are supposed to be trying to use the debt ceiling as leverage against the White House and Congressional Democrats. And they are simultaneously waving that leverage away, saying either that Treasury can keep most of its normal operations going, or that the default apocalypse that economists warn is on the horizon is imaginary.
Consider these two Ted Cruz statements, alongside one another:
1. "Will the U.S. default on its debt? ... The answer is of course not.”
This is some extreme cognitive dissonance here. The debt ceiling has not, actually, been historically used as a leverage point to rein in the executive branch. (The debt ceiling needs to be occasionally raised because of bills and allocations passed by the legislature.) But even if that were true, one might be given to wonder, what good is using the debt ceiling as a leverage point if the U.S. isn't going to default on it's debt? The threat of default is the leverage.
It's very strange. I don't think it's lost on any of these Republicans that the whole plan here is to hold the debt ceiling hostage in exchange for a series of demands. And they are making no offer in return -- raising the debt ceiling is what's supposed to be the concession.
But then they are simultaneously putting out a message that breaching the debt ceiling would not be a big deal. What force, then, is supposed to compel the Democrats to come to the table? This is not how hostage-taking works. There is supposed to be the threat of a consequence. It's supposed to be, "Pay my ransom or the hostage dies." It's not, "Pay my ransom or else everything will be perfectly fine, hey, don't even worry about it."
I would definitely love to play poker against some of these people, you know, if they weren't playing games with the global economy.
CORRECTION: This article has been updated to correct an error in the original. Representative Ted Yoho is a Representative from Florida, not Texas. I regret the error. #YOLO.
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This story appears in Issue 71 of our weekly iPad magazine, Huffington, available Friday, Oct. 18 in the iTunes App store.