https://www.youtube.com/watch?v=dJj4chwTwaY
For the last few weeks politicians and economists of all political stripes have been warning about the effects of a possible default if the Congress does not lift the nation’s debt ceiling by October 17th. Senator Pat Toomey, however, believes these fears are overblown.
In an interview on MSNBC’s “Morning Joe” on Wednesday, the Senator dismissed concerns that the nation would default on its debts.
“There’s zero chance that the U.S. government is going to default on its debt,” Toomey said. “It’s unfortunate that people have conflated this idea of not raising the debt ceiling immediately on Oct. 17 and somehow defaulting on our debt. [Democrats] want to be able to hold the specter of a catastrophe in front of Republicans to cow us and intimidate us into giving the President what he wants, which is a whole lot of additional borrowing authority with no reforms whatsoever.”
This set up a confrontation between the Senator and Treasury Secretary Jack Lew when Lew came to testify in front of the Senate Finance Committee about the consequences of the nation hitting the debt ceiling.
“As secretary of Treasury are you prepared to assure us … and the entire American economy that under no circumstances will you permit a mispayment on a U.S. Treasury security obligation?” Toomey asked.
Lew countered that the only way the country could pay all its obligations was to raise the debt ceiling. Toomey interrupted Lew, accusing him of dodging the question. Lew asserted that ultimately it would be the President, and not him, who would make the decisions and added that an inability to pay all the nation’s bills would qualify as a default.
Toomey was upset that the Administration seemed to have no back-up plans while the Secretary ridiculed the type of contingency plans the Senator was asking for.
“How can the United States choose whether to send Social Security checks to seniors or pay benefits to our veterans?” Lew had asked in his opening remarks. “How can the United States choose whether to provide children with food assistance or meet our obligations to Medicare providers?”
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5 Responses
Even if this were legally possible, there’s a technological aspect that makes it virtually impossible to do. So let’s say that Treasury decides it has the legal authority to prioritize payments, that it develops a priority list and also the necessary algorithms to decide who gets paid and when. Treasury makes 80 million automatic payments each month – automated using computer technology, most of which is purpose-built, much of which is on decades-old legacy hardware, and none of which was designed with some far-fetched debt payment prioritization contingency in mind because Congress has never before been so reckless with the debt ceiling.
So now Treasury has to somehow implement these prioritized payments manually by re-assigning hundreds or thousands of federal employees and retraining them… all in time to make these payments before the US defaults… rather than Speaker Boehner holding a vote for which the numbers are almost assuredly there. Considering the costs involved and the economic damage, it becomes truly absurd to think that these people consider themselves “fiscally responsible”.
Thanks to the GOP’s idiotic continued support of Corbett for Governor, PA will never elect a Republican again statewide. That you Bob Asher for giving us Tom Corbett who has damaged the brand beyond repair while demographics have hastened the GOP demise. Corbett is the symbol of the natural progression of running the state party the Asher way. Asher is, rightly, the man to blame. Candidate selection, Bob. The candidate has to be competent.
Pat Toomey is right. Listen to him back down Mika Bzezinski. She is whimpering.
Jack Lew is from Citigroup and tightly wound up with Wall Street. Jack Lew headed up the Citigroup unit that shorted the housing market and made a fortune. http://www.huffingtonpost.com/2010/07/14/jack-lew-obamas-omb-pick_n_645093.html
Pat should ask his old buddies on Wall Street what they think…
Pat Toomey is a Jackass.
This should be a seat the Dems win back in 2016.