Who will blink first?
Sen. Pat Toomey (R-Pa.) arrived in Washington, D.C., just a month ago, but he hasn’t wasted any time challenging Senate Democrats on a central economic issue: the debt ceiling. PoliticsPA reported last month on Toomey’s efforts to articulateconservatives’ debt ceiling argument, and on Wednesday Toomey unveiled his first piece of legislation in the 112th Congress: the Full Faith and Credit Act, filed as an amendment to the FAA Reauthorization Act.
Expanding on a previous op-ed in The Wall Street Journal, Toomey’s bill would require the Treasury Department to service debt using current government revenue even if the Senate fails to raise the debt ceiling, according to a press release provided by his office. Toomey hopes that by removing the specter of default, Republicans will be able to leverage deficit reduction measures and cut excessive federal spending against the Senate Democratic majority and the White House.
As Toomey argues, “Failing to raise the debt ceiling is not a desirable situation and would be disruptive, but the worst thing we can do is simply continue the irresponsible deficit spending that jeopardizes our economic future.”
Of course, he may be wrong.
As Senate Democrats and the Obama Administration have forcefully argued, if the U.S. does not raise the debt ceiling soon, the government will default on its debt and risk “a worse financial economic crisis than anything we saw in 2008.”
Even Toomey admits the possibility of default could be disastrous, which is why he’s hoping to avoid such a calamity by reassuring debt obligations through his legislation. “Even the threat of a payment default on our debt could drive these consumer and small business borrowing costs through the roof,” Toomey wrote in a letter to Treasury Secretary Tim Geithner.
Ultimately, Toomey is attempting to convince moderate Republicans and some centrist Democrats that raising the debt ceiling will not result in a second financial meltdown. This would give Republicans the leverage they need to win big victories on government spending levels.
While Toomey’s bill does not look likely to pass the Senate, the bill has garnered 18 Republican co-sponsors. More importantly, Toomey is lending his financial expertise to the Republican caucus and positioning himself as a leading fiscal conservative in the chamber in the coming years.