It's All Politics
Wed July 13, 2011
Bachmann, Other House Conservatives, Accuse Obama Of Debt Scare Tactics
Rep. Louis Gohmert, a Texas Republican, suggested Wednesday that he'd like President Obama to be more like President Franklin D. Roosevelt.
No, he wasn't talking about wanting Obama to massively expand the federal government or engage in more Keynesian pump-priming.
Rather Gohmert, joined at a Capitol Hill news conference by Republican representatives Michele Bachmann of Minnesota, a presidential candidate, and Steve King of Iowa, wanted Obama to channel the spirit of FDR's first inaugural where Roosevelt warned Americans against "nameless, unreasoning, unjustified terror."
Gohmert and his colleagues accused Obama of trying to scare Americans with warnings of calamity if the debt ceiling isn't increased by the August deadline.
The lawmakers seemed particularly upset with the president for indicating that if the debt ceiling isn't raised, certain payments might not be made, like some military pensions and Social Security payments.
GOHMERT: And let me just say, with regard to any president, particularly the current one, who has never thought of saying something like "the only thing we have to fear is fear itself," and instead is out there saying we got another crisis; seniors, you may not get your check; you know, veterans, you may not get your check. I would encourage the president and those advising him, take a look at what you have.
By "look at what you have", Gohmert seemed to be saying that the U.S. government owned plenty it could sell or liquidate to make required payments to retirees and other Americans.
You've got 129 billion (dollars) in TARP assets. You have land. You've got leases that Salazar returned the checks on when he first
came into office. There are all kinds of assets.
The main point of the news conference was to plug legislation introduced by King to insure that if there is a default, U.S. military members and investors would get paid what they were owed.
Bachmann, who opposes a debt-ceiling increase, accused the president of trying to con Americans with a "misnomer."
Bachmann: This is a misnomer that I believe that the president and the Treasury secretary have been trying to pass off on the American people. And it's this: that if Congress fails to raise the debt ceiling by two-and-a-half trillion dollars, that somehow the United States will go into default and we will lose the full faith in credit of the United States. That is simply not true... We cannot go on scaring the American people. We need to be truthful.
Actually, there's been a fair amount written and said about why the U.S. government can't just pay its bondholders and a few chosen others and let everyone else go begging.
Because many investors wouldn't be fooled by that. They would see the U.S. government as failing to meet its obligations. It's never good for a borrower to be viewed in that light.
In an article on CNNMoney, Jeanne Sahadi, explains why Treasury Secretary Timothy Geithner couldn't easily do what the three Republican lawmakers want him to do:
Either way, he would be put in the completely ridiculous position of having to prioritize who besides bondholders should get paid first and which federal contractors and programs would be effectively issued I.O.U.s payable when Congress comes to its senses and raises the debt ceiling.
That could mean deferring payments to Social Security beneficiaries, Medicare doctors, weapons vendors or taxpayers expecting refunds.
It's a ridiculous position to put any treasury secretary in because the debt ceiling is not a cause of rising debt or a "license to spend more" — as some incorrectly allege. It simply authorizes Treasury to pay the bills Congress chose to incur when it passed years worth of spending increases and tax cuts that are now law.
"The decisions that create the need to borrow are made separately from — and generally earlier than — the decision about the debt limit," according to a report from the Government Accountability Office.