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Hitting the Debt Ceiling Not Unthinkable? Congress Sounds Off

William A. Galston

We survived the Cuban missile crisis because enough leaders on both sides believed that nuclear war was unthinkable.  The most troubling feature of the debt ceiling crisis is the number of elected representatives who have persuaded themselves that hitting the ceiling is not unthinkable.  Consider the following statements, culled from today’s news:

  • Rep. Mo Brooks (R-Ala): “We have 10 times as much tax revenue as we’ve got annual interest on the debt obligations.  So if the president does not want us to default on our credit or obligations, we won’t.”
  • Rep. Ted Yoho (R-Fla): “I ran on not raising the debt ceiling.  We will not default.  And I think it’s a lot of hype that gets spun in the media.”
  • Rep. Steve King (R-Iowa): The possibility of a disastrous default is a “false narrative that’s been perpetuated by this administration.”
  • Rep. Tim Huelskamp (R-KS): “I understand Wall Street makes their money on trading these Treasuries, but Main Street?  This has no impact on them.”
  • Rep. Joe Barton (R-TX): “This talk about default by the US Treasury is nonsense.  I would assume, as smart as President Obama is, when push comes to shove, he’ll be smart.”
  • Rep. Justin Amash (R-MI): “There’s no way to default on Oct. 17.”
  • Sen. Richard Burr (R-NC): “[I’m] not as concerned as the president is on the debt ceiling, because the only people buying our bonds right now is the Federal Reserve.  So it’s like scaring ourselves.”
  • Sen. Rand Paul (R-KY and possible presidential candidate): “It really is irresponsible of the president to try to scare the markets.  If you don’t raise your debt ceiling, all you’re saying is, ‘We’re going to be balancing our budget.’”

Hardly anyone who knows anything about this issue agrees with these sanguine assessments.  The Wall Street Journal recently ran a front-page story headlined “Top Bankers Warn on U.S. Debt Proposal.”  It begins as follows:

“Top Wall Street executives are warning that any effort to pay interest on U.S. debt before other obligations such as Social Security, a strategy some lawmakers think would placate bond investors if the government breaches its borrowing limit, would pose severe risks to financial markets and the economy. . . .  [P]utting some payments ahead of others would create insurmountable uncertainty for investors, drive up borrowing costs and cause market disruptions.”

Main Street businesses agree.  The U.S. Chamber of Commerce and the National Association of Manufacturers, neither known as bastions of liberalism, both sent letters to Congress urging action on the debt ceiling. According to the NAM, “[F]ailing to raise the debt limit in a timely fashion will seriously disrupt our fragile economy and have a ripple effect throughout the world.”  The Chamber’s letter, signed by 251 business groups, urged Congress to “raise the debt ceiling in a timely manner and remove any threat to the full faith and credit of the United States government.”

In a related development, the Gallup organization reported this morning that the American people now regard dysfunctional government as the nation’s most serious problem, easily topping the economy and jobs.  “These latest results,” says Gallup, are “one more example of the overwhelming lack of faith the U.S. public has in their government.”  Other examples Gallup cites: “Congress approval is now within one percentage point of being the lowest in history, trust and confidence in government was at record lows before the shutdown occurred, and the upheaval in Washington is causing Americans’ confidence in the economy to drop precipitously.”

Events in Washington have brought the United States to the brink of a governance crisis.  Doubts about our leadership are spreading around the world, with incalculable consequences for global stability.  If there was ever a time for leaders to put the past behind them and rise about the partisan fray, that time is now.

Two hundred and twenty five years ago, as the struggle over the ratification of the Constitution raged, James Madison warned that “Enlightened statesmen will not always be at the helm.”  We are now testing his confidence that the institutions he designed are sturdy enough to get along without them.

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