Several Republicans have cast doubt upon the economic effects of failing to raise the nation’s debt ceiling by Aug. 2 (when Treasury has said the U.S. will have completely exhausted its ability to borrow). The prevailing theory is that the Treasury Department would have ample revenue to cover the most important expenditures, while everything else could go by the wayside.
As the Bipartisan Policy Center has pointed out, this simply isn’t true: the U.S. would likely not have enough revenue to cover all the Social Security checks that are due on Aug. 3 if the debt ceiling isn’t raised. Failing to raise the debt ceiling would force a 44 percent cut in government spending overnight, leaving vital programs like food inspection, student loans, and border security to fall by the wayside (unless Treasury decides to not pay for huge programs like Medicare).
Some Republicans, including House Budget Committee Chairman Paul Ryan (R-WI), have said a few days of forcing Treasury to prioritize payments wouldn’t be a bad thing. But one congressman, Rep. Eric “Rick” Crawford (R-AR), thinks that process should go on for quite a bit longer:
“That wouldn’t work for just a few days. That would work for a few years,” said Crawford, who added that he would agree to raising the debt limit only if such a bill included major changes in federal budget priorities. Budget deficits, he said, require “that we take some painful measures now. I’d rather swallow that bitter pill today.”
Credit rating agencies have warned the U.S. that failing to pay some obligations, even if every debt interest payment is made, would still result in a downgrading of U.S. credit. But Crawford isn’t alone in saying the U.S. should actively drive itself over the debt ceiling cliff. Rep. Devin Nunes (R-CA) called for the U.S. to default because “it could benefit us to go through a period of crisis.”