Senators Say the Darndest, Scariest Things About the Debt-Ceiling
Questions at congressional hearings are never, ever just questions. They're more often four minutes of verbal chaos, culminating in a randomly placed question mark. And when those questions come at a hearing about the impending debt-ceiling breach, they can be really, truly scary.
This is what happened on Thursday morning when the Senate Finance Committee spent just about two hours in a back-and-forth with Treasury Secretary Jacob Lew.
Questions ranged from out-of-context gems like Max Baucus's "Computer. How do you reprogram computers?" to increasingly stretched analogies, care of Chuck Schumer: "So would you agree with my analogy," the New York senator asked the Treasury secretary, "blindfolded man walking towards a cliff and we don't know exactly what date we'll fall off but if we keep walking we will, is that pretty accurate?"
In normal times, these questions can be written off as goofy, an "Oh, that's my Senate," kind of thing. But with the global economy on the line, some statements from the senators underlined a stark misunderstanding about what is actually going on.
"I think we have the blindfold off," Sen. Pat Roberts, R-Kan., said, modifying the Schumer analogy. There's "no action on entitlement reform. No action on tax policy." This line of thinking was prevalent among the Republicans on the panel: We don't want a debt-ceiling crisis either, but the big problem is the ongoing crisis of our national deficit.
"We've got a problem with outgo, not income," Sen. Michael Enzi, R-Wyo. said. Sen. Rob Portman, R-Ohio, put it a bit more straightforwardly: "We need to avoid a debt-limit crisis. But we also need to avoid a debt crisis."
The thing is, right now there isn't an urgent, spiraling, out-of-control debt or deficit crisis. The Washington Post's Ezra Klein illustrated this point recently. Here's a chart he put together of what our deficit picture has looked like over the past few years:
Yes, entitlement spending will makes this problem worse over time if it goes untouched. But the problem is nowhere near as urgent as raising the debt ceiling by next week. That's a huge difference since 2009. As Klein put it, "Republicans delivered on their 2010 promise to reduce the deficit, and now they're adrift."
Sen. Pat Toomey, R-Pa., tried to make the case for deficit urgency. Like others on the panel, he said he'd like to see entitlement reforms attached to a debt-ceiling increase. But the end of his point here got a little (to belabor a point) scary:
"I hope that we do pass a debt-ceiling increase, with appropriate reforms. Because there's no question in my mind, at some point if we don't raise the debt-ceiling, it will become disruptive."
Emphasis there is ours. This statement hit on another belief in Congress that Secretary Lew tried desperately, and probably futilely, to dispel: The idea that the Treasury Department has the ability to prioritize payments in a way that would avoid default. Enzi also tried to play down the talk of immediate economic peril, saying his Wyoming constituents don't buy the administration's "the sky is falling," "the earth will erupt" attitude.
Toomey was the most enthusiastic senator on this point. He repeatedly asked Lew if he would, through prioritization, make sure "to plan for contingencies" so that the U.S. doesn't have a "mispayment" on a security obligation. Lew responded that the only way to ensure that would be to raise the ceiling, and that "there's no good solution if Congress fails to raise the debt limit," as no other means has ever been tested and could result in market panic at best.
The Pennsylvania Republican's response:
"Frankly, I'm shocked that the secretary of the Treasury will not assure the financial markets, American investors and savers, and the millions of people who hold treasuries, that they don't have to worry about the security of their treasuries. And I'm extremely disappointed."
That's not a very optimistic attitude. While House Republicans are currently readying a plan for a short-term debt-ceiling increase, and Lew made clear Thursday that the White House would be open to such a plan, an insistence on tying entitlement reforms to a long-term debt-ceiling increase could imperil an actual solution post-November. Outside of a short-term fix, the White House and Senate Democrats, and Republicans in Congress are still very far apart.
"People watching this on TV must be uh, frustrated, disappointed with us," Sen. Thomas Carper, D-Del., said. He's surely got a point.