Democrats who think that the GOP will blink first on the debt ceiling issue had better proceed with caution. Senator Pat Toomey is on a full court press today with a rebuttal to the argument that refusing to raise the debt ceiling will result in catastrophe.
“We can do so without jeopardizing the full faith and credit of our country—and we should,” he argues in an op-ed to the Wall Street Journal. Toomey calculates that government revenue is more than enough to cover America’s debt payments in the case of a stalemate.
“I intend to introduce legislation that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised. This would not only ensure the continued confidence of investors at home and abroad, but would enable us to have an honest debate about the consequences of our eventual decision about the debt ceiling,” wrote Toomey.
His proposal would allow Republicans to back up their tough talk on the debt ceiling, using the vote as leverage for spending cuts. At the same time it would allow the GOP to avoid the political liability associated with risking, in the words of White House economic adviser Austan Goolsbee, a catastrophic impact on the economy “that would be a worse financial economic crisis than anything we saw in 2008.”
The GOP needs a convincing response to Goolsbee’s argument if party leaders hope to secure conformity among moderate Republicans and win support from centrist Democrats. Or, at the very least, to strengthen the GOP’s position at the bargaining table.
Toomey’s argument is just that. He gives intellectual heft to a position that had previously been dismissed out of hand.
And Toomey is spreading the word. His earlier quote came during an interview on Fred Thompson’s radio show. Before that he made his case to WHPT’s Chris Stigell, Northeast PA’s WILK-FM, and Fox and Friends.
Though he himself admits that it is likely that the debt ceiling will be raised, Toomey hopes that the debate will result in compromises from Democrats on other spending cuts.
“Inevitably, we’re going to probably have to raise the debt limit,” he told Thompson. “But we shouldn’t do that without serious reforms to the spending process.” We need “immediate cuts in spending and spending process reform,” Toomey emphasized.
The breadth of GOP opposition to raising the debt ceiling remains to be seen. In any case, Democrats should be prepared to play hard ball.