Last week, the federal government came within a hair’s breadth of defaulting, something that has never happened in history.
Rep. Russ Fulcher, Sen. Mike Crapo and Sen. Jim Risch all voted against the deal to raise the debt ceiling for two years. Only Rep. Mike Simpson supported it.
The effect of breaching the debt ceiling would have been a global financial panic. A recent analysis by Moody’s summed up the outcome succinctly: “The blow to the economy would be cataclysmic.”
In default, the holders of U.S. treasury bonds, the central safe asset for much of the world, would fail to be paid for the first time ever, triggering a global financial crisis. Some Social Security recipients’ checks wouldn’t show up. Some veterans would discover they have no benefits. Some active-duty military paychecks wouldn’t be sent out.
And all this is an absurdity that has nothing to do with reducing the debt.
It isn’t really a way to limit federal debt. The way to do that would be to cut spending or raise taxes. The debt limit is rather like making a vow that once your credit card hits a certain level you will stop making credit card payments.
Simpson summed it up well in his statement after the vote: “Raising the debt limit does not create new spending — rather, it allows the federal government to pay back loans that were taken out in the past and ensures that the government meets its obligations to bondholders, taxpayers, Social Security recipients, and the veterans and service men and women who have served our country faithfully.”
As is often the case when a politician knows the safe outcome is already in the bag, opportunities for posturing present themselves.
So defaulting on the debt and failing to pay the military was the outcome Fulcher, Crapo and Risch voted to support — knowing that of course it wouldn’t happen, so they could safely use it as a moment to show off how deeply conservative they are. And the preening commenced immediately.
“In a negotiation where the Senate and White House were controlled by Democrats, Speaker (Kevin) McCarthy did an admirable job in gaining some Republican victories. However, ultimately I cannot justify the debt implications that the legislation poses to Idahoans and fellow Americans,” Fulcher said in his press release.
“This was a time to ensure new federal government bills do not continue to pile up. Instead, the White House continues to push its inflationary policies with no firm commitment or requirement to exercise fiscal restraint,” Crapo said in his release.
“This debt ceiling increase puts a band-aid on a hemorrhage, and we will be in this same situation again and again until we address the federal government’s underlying spending problem,” Risch said in his release.
You should see through the dishonesty in this posturing.
Simpson voted for a plan that will make some modest deficit reductions — deficit reductions that have the advantage of being real, unlike the imaginary spending cuts invoked by the other three.
Not that the deal was a great one. The addition of work requirements to nutrition assistance programs, for example, is likely to result in no additional employment but some additional hunger. The debt ceiling should have simply been raised, or even better, abolished.
But at least Simpson’s was an honest vote.
The others voted not to pay the bills they already ran up. They didn’t vote to rein in the debt in any way (indeed they repeatedly voted to massively expand it during the Trump administration).
They simply voted to make America a deadbeat nation, and they didn’t knock one dime off the deficit by doing it.
Bryan Clark is an opinion writer for the Idaho Statesman based in eastern Idaho.