The United States is again approaching its debt limit, though an improving economy and new revenues have pushed the deadline for when it will need to be raised as far back as October. And yet again, Republicans are pushing legislation that amounts to nothing more than a phony fix to the issue, a bill known as the Full Faith and Credit Act that will prioritize debt payments in a way that House Speaker John Boehner (R-OH) says “makes it clear to our bondholders that we’re going to meet our obligations.”

But such a plan makes it clear that the U.S. will meet only some of its obligations, leaving many Americans, including troops, veterans, and the elderly, out in the cold. Boehner doesn’t see that as a problem, he told Bloomberg TV last night:

COOK (Host): Doesn’t it mean as Democrats have suggested you’re basically choosing to pay China before U.S. troops?

BOEHNER: Listen. Those who have loaned us money, like in any other proceeding, if you will — court proceeding — the boldholders usually get paid first. Same thing here.

Worse yet, the Republican plan doesn’t allow the nation to avoid default. If the U.S. services its debt payments but still misses others, it is still defaulting on payments it is required to make. Since the bill only allows Treasury to make payments as it receives revenues, and the bulk of its payments are made at the beginning of the month even though revenues don’t come in until later, it would almost certainly be unable to meet at least some of its obligations.

When the GOP has considered similar plans before, Treasury officials have called it “unworkable.” Bipartisan analysts said it was “essentially impossible.” Failing to fulfill spending obligations would be “the first step to becoming a banana republic,” a Bush-era Treasury official said. Instead of inspiring confidence among investors, bondholders, and the American people, the legislation would zap it.

Far from preventing default, the Full Faith and Credit Act would essentially ensure it. That wouldn’t just put paying China ahead of senior citizens and members of the military — it would also hammer economic growth both in the United States and across the world. (HT Huffington Post)

House Speaker John Boehner (R-OH) sent a memo to his House Republican colleagues Thursday touting supposed successes the GOP has had this year, and he doing so he urged his caucus to continue their attempts to stave off a debt crisis economists say does not exist.

Boehner’s memo argues that Republicans have been successful in putting pressure on Democrats and President Obama to address the nation’s “soaring debt.” It then goes on to outline areas where the country is still struggling, with these two statements listed first:

The president hasn’t succeeded in getting his additional tax hikes – but the economy still isn’t growing as it should be growing.

The federal bureaucracy is spending less than it otherwise would – but the national debt continues to grow, crowding out investment and eroding confidence needed to support growth.

Those statements are intertwined more than Boehner realizes, since it is his party’s focus on the debt that is holding back the economy’s ability to grow “as it should be growing.” Government spending has plateaued in recent years because Washington has undertaken deep deficit reduction efforts, and spending on domestic programs will be at lower levels this year than it was in 2007, before the Great Recession began. Government spending typically drives economic recoveries, but this time it is actively hindering the recovery because of the budget cuts that have already been enacted.

Meanwhile, Boehner and Republicans like Rep. Paul Ryan (R-WI) continue to ignore those facts, arguing instead that debt is “crowding out investment…needed to support growth” and putting America on a path to a debt crisis. Economists, however, say neither of those statements is true. “The argument that heavy debt loads slow economic growth doesn’t hold a lot of water,” one told Bloomberg last week, with others adding that the U.S. faced little-to-no threat of a debt crisis in the future.

What the U.S. has instead is an unemployment crisis, one that Boehner acknowledges when he states that “the economy still isn’t growing as it should be growing.” The problem is that Boehner and his Republican colleagues keep supporting policies that will ensure that America’s road to economic recovery is far longer than it should be.

Right after the House of Representatives approved a Senate bill to avert a government shutdown, House Speaker John Boehner (R-OH) set the stage for another down-to-the-wire crisis that will threaten the nation’s economic growth. At his weekly press conference, Boehner indicated that Republicans would again demand spending cuts in exchange for raising the nation’s debt ceiling, which it is set to hit in May.

Boehner said Republicans would only raise the debt ceiling if they got an equal amount of spending cuts, the Huffington Post reports:

“Dollar for dollar is the plan,” Boehner told reporters, adding that there have been no major talks on the debt limit at this point.

“The president has been clear that he’s not going to address our entitlement crisis unless we’re willing to raise taxes. I think the tax issue has been resolved,” said Boehner. “So at this point then, I don’t know how we’re going to go forward.”

Boehner’s House of Representatives has created an atmosphere of perpetual crisis in Washington since the GOP took control in 2011. The GOP took the government to the brink of shutdown early in 2011 before nearly forcing a default by demanding spending cuts in exchange for a debt ceiling increase that summer. That fight set up sequestration, the automatic budget cuts that threatened to derail the economy at the beginning of 2013 before a last minute deal pushed them back to the beginning of March. Republicans failed to extract more cuts when the debt ceiling was temporarily extended in January, but Boehner is now seeking to make sure cuts happen in May — even though the U.S. has already cut more than $2 trillion in spending over the last three years.

Those cuts have hammered the economic recovery, as has the culture of crises Boehner and the GOP have created. The last debt ceiling fight increased borrowing costs and slowed down economic growth, but despite evidence that both the GOP’s fights and their preferred policies are harming the economy, Boehner insists on repeating the same mistakes. Raising the debt ceiling was never an issue for Boehner when George W. Bush was president, but the recent fights have proven so harmful that top policymakers like Federal Reserve Chairman Ben Bernanke are now calling for the permanent abolition of the debt limit.

The arrival of budget season has brought debt panic back to the Beltway. But President Obama threw cold water on the matter last week, telling ABC’s George Stephanopoulos that the United States does not face “immediate crisis in terms of debt.” And this morning, House Speaker John Boehner (R-OH) essentially told ABC’s Martha Raddatz he agrees with Obama, calling the debt crisis “looming,” but not “immediate.”

“We do not have an immediate debt crisis,” Boehner said on ABC News’s “This Week With George Stephanopoulos.” “But we all know that we have one looming. And we have — one looming — because we have entitlement programs that are not sustainable in their current form. They’re gonna go bankrupt.” [...]

“[President Obama's] point, as he went on to say in that interview, is that we don’t — we don’t really need to do anything at this point. And I would argue that we do need to do something,” said the House speaker.

Debt is already projected to remain at or below its current share of the economy for the next decade, and it’s good that Boehner is standing in agreement with the president on that point.

Unfortunately, the budget the House Republicans just released does not reflect this realization. It cuts all spending that isn’t Medicare, Social Security, or the military down to near-historic lows over the next ten years. America’s economy remains in the doldrums, leaving the unemployment rate at 7.7 percent (it has never been that high for that long since the Great Depression) and all the real-world evidence we have indicates that austerity in depressions cripples economic growth. If everyone agrees the debt crisis is not immediate, then job growth and economic revival should be topping deficit reduction on the country’s list of priorities.

Nor is there a great deal of evidence to back up Boehner’s distinction between an “immediate” and “looming” debt crisis. The long-term projections of mounting debt he and other D.C. lawmakers rely on are in fact riddled with dramatic assumptions and uncertainties about the future behavior of both Congress and the economy.