The Washington Post reported today that the Treasury Department is already juggling money around federal accounts in case Congress fails to raise the nation’s debt ceiling before it is reached in a matter of weeks. Allowing the U.S. to hit its legal borrowing limit would cause widespread economic pain, but Republicans have been demanding various concessions in return for their vote to raise it.
At the same time, however, GOP leaders fully acknowledge that the debt ceiling has to be raised. “”We’ll have to find a way to help educate members and help people understand the serious problem that would exist if we didn’t do it,” said Speaker John Boehner (R-OH). House Budget Committee Chairman Paul Ryan (R-WI) called failing to raise the debt ceiling “unworkable.” But both Boehner and Ryan have then attemped to extract concessions in return for doing what they’ve already admitted they must do in any case.
House Majority Leader Eric Cantor (R-VA) joined this group today, first proclaiming that everybody “agrees that we’ve got to pay our bills,” before threatening not to raise the debt ceiling:
First of all, Joe, you know, America pays its bills. I think everybody sort of agrees that we’ve got to pay our bills, but I don’t think that that comes at the exclusion of trying to fix the problem here. We are in a debt crisis, I think the markets, global investors, the American people are expecting us to deliver on our commitment that we’re going to change the spending crisis in Washington. So together with that debt limit vote has to be some real reforms. And I mean real.
But unless the debt ceiling is raised, America will fail to pay some bills. Treasury can, for a limited amount of time, ensure that interest payments on the debt are made, thus avoiding traditional default, but those payments would come at the expense of other promised payments, as the government could only spend whatever tax revenue comes in month to month. Inevitably, some obligations would not be met.
Everyone from banking executives to the GOP’s favorite economic validator have said that the debt ceiling has to be raised in order to avoid a slew of negative economic consequences. But Republicans are continuing to play chicken with the country’s creditworthiness.