How You Know Republicans Aren't So Serious on the Debt Ceiling

If you’re looking for evidence that Republicans will—despite their rhetoric—eventually cave on the debt ceiling, it’s worth noting a recent statement from Rand Paul, to Business Insider, on how he thinks the GOP should approach the ceiling. Rather than force a shutdown, Paul thinks Republicans should pass a bill that would prioritize payments to bondholders if the limit is reached. This would, he says, “force us immediately to have a balanced budget.”

“The only real way to have leverage with the debt ceiling is to convince people that we are not going to default on our debt,” Paul said. “We could actually direct the President to pay our interest, make Social Security payments, pay soldier salaries, the basic functions that could keep government going. That way we take default off the table.” […]

“We have tax receipts to pay for about 70 percent of the government and we’re running deficits of about 30 percent, so what I would say is pay for the 70 percent we would all keep going and stop paying the other 30 percent until we come to an agreement,” Paul said.

Like Karl Rove and other Republicans, Paul says—outright—that he doesn’t want the United States to go into default. Hence this proposal, which would prevent default but also force Democrats to negotiate on Republican terms. Of course, there’s no chance this would move to the president’s desk—Democrats won’t willingly give leverage to hostage takers.

Even still, the mere fact that Paul has floated this bolsters the argument that Republicans aren’t as committed to hitting the debt limit as they let on. If Democrats decide to negotiate—as they did in 2011—odds are good that the GOP will stick to its guns, knowing they can force concessions from the White House. But if Democrats refuse to negotiate—and default becomes a real possibility—then, as Greg argues, you might see Republicans throw in the towel and agree to a clean debt ceiling increase.

The real question, I think, is whether Democrats are able to find a way to permanently move the debt ceiling off of the table. As long as congressional action is needed to authorize borrowing, a party or faction can continue to use the threat of default as a way to extract concessions.

This is why the platinum coin is such a useful idea—it provides the basis for a trade. Republicans agree to abolish the debt limit, and Democrats agree to rewrite the law, and relinquish the coin as a tool. Everyone wins, including the economy.

Comments

The democrats should prioritize social security checks and federal employee checks (not congressional staff checks) in the Senate and dare the republicans to filibuster.

If it comes to a need to prioritize payments, Democrats should prioritize federal payments away from districts represented by Republicans.

Trying to rein in our "drunken sailor" spending is also a novel approach!

yeah, let's not ever mention spending. that would be sacrilege. the many federal employees watching porn and playing video games all day (and before you shoot your mouth off, my brother worked at the patent office, and that is his report) would be out of a well-deserved paycheck. let's just keep borrowing and spending, and telling ourselves via various lefty economic lies that it's ok to behave this way in a world of other nations. sure, right...

The federal employees watching porn and playing video games all day were in the Securities and Exchange Commission. They were allowed to do so, and were given nothing better to do by a Republican agency head who was opposed to the very idea of financial regulation, and who saw his mission as to prevent the agency from doing its job. Without some special intervention by management, federal computers are blocked from accessing porn or installing video games.

yeah, let's not ever mention spending. that would be sacrilege. the many federal employees watching porn and playing video games all day (and before you shoot your mouth off, my brother worked at the patent office, and that is his report) would be out of a well-deserved paycheck. let's just keep borrowing and spending, and telling ourselves via various lefty economic lies that it's ok to behave this way in a world of other nations. sure, right...

To david77. Your statement "The democrats should prioritize social security checks and federal employee checks (not congressional staff checks) in the Senate and dare the republicans to filibuster" has some partial merit. You forgot to add that we can also pay the interest on our debt and not default. The President through his new Treasury Secretary (he'll be confirmed) Jack Lew can pick and choose who not to pay, but I'll bet he will threaten not to pay SSN.

The Republicans don't have to filibuster in the Senate. I think the Republicans in the House should demand that the Senate, under the lawless Harry Reid, pass a budget and Obama sign it, before the debt ceiling is increased. Then we can all see where the money is going. This must also be the end of the Continuing Resolutions. Blame the Republicans, it's just the begining of a new term, voters won't remember in two years.

The House GOP should introduce legislation (through the normal committee to floor process) that freezes spending at last year's levels and a commensurate increase in the debt limit. THEN, it should allow equal and plentiful amendment votes by Democrats and Republicans and pass the resulting legislation. Then the House GOP shouldn't do ANYthing else until the Senate acts on it. The Senate can amend it, pass it or defeat, but they must act on it. Take resulting bills to conference committee and pass the compromise. If it fails or the President vetoes, then start all over. FOLLOW THE PROCESS and ALLOW AMENDMENTS. It will be much more dificult for the Dems and the President to ignore GOP proposals.

Not raising the debt ceiling does not result in a default on our outstanding debt. Interest and principle payments on our debt would take priority over all other disbursements - including salaries and benefits for politicians and their staffs.

Further, while it might take a lawsuit to settle this, the dedicated funding for social security and medicare, along with the trust fund which holds U.S. debt should prevent these programs from not continuing to function normally.

The default scare is but a distraction.

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Everyone agrees that the nation is coming up against the trillion debt ceiling. The debate is over when that will happen, Jack Lew I will hear language like, 'Well, we are heading toward the debt ceiling and you are going to default.
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