The Tea Party's Government Default Fantasy

By Robin Marty, Rolling Stone

12 October 13

as the Tea Party been listening to too many late night infomercials? ("Bad credit? No credit? No problem!") There is no other explanation for the way some of the far right wing's most vocal figureheads are claiming that really, the federal government defaulting on its debt might not be such a bad idea after all.

The Republican Party has traditionally made "kitchen table economics" a key talking point in their push for fiscal responsibility. The government must be run like a family's budget, they claim, arguing that when the expenses are greater than your income, it's time to make the hard cuts.

Indeed, that's how it should and does work for many American families, especially when things get tight. But most families also recognize that when it comes to the essentials, if you bought it, you have to pay for it. If the option is opening just one more credit card or finding a short-term loan versus losing the house or the car, you look to credit, knowing that without the home or car your options for earning more become exponentially bleak.

It's a solution that even the GOP can usually recognize is beneficial in the long run, and it's the reason why the debt ceiling has been raised 45 times since President Reagan was in office, all with bipartisan support and most of them with absolutely no concessions or negotiations.

So what has changed? The Tea Party, of course. A radical group of extremists groomed on the Grover Norquist idiom that "government should be small enough to drown in a bathtub," the faction came into power at a time when the biggest qualification for running for Congress was having absolutely no legislative experience. They ran on a platform of dismantling the government and, now that they see their opportunity, they aren't intending to let a little thing like default or the collapse of the American economy stop them. And they are being egged on by some major supporters.

"Don't let Obama lie to you: even MOODY'S says U.S. will NOT default if debt ceiling is not raised," tweeted Bryan Fischer of the American Family Association, a fundamentalist right-wing Christian organization that organizes "values voters." Moody's actually says that as long as the government pays all the interest and principal there would be no risk of its credit rating being affected - which essentially assumes that the government will be able to meet those financial requirements, and would thereby not default. The Department of Treasury states that this strategy would be unlikely to work for more than a few days.

Far-right spokespeople like Fischer have been goading lawmakers into a game of chicken over default, and it's one that members of Congress are more than willing to embrace. "I think, personally, it would bring stability to the world markets," said Rep. Ted Yoho (R-Florida), who argued that refusing to raise the ceiling would show the U.S. was serious about addressing its debt.

Sen. Tom Coburn (R-Oklahoma), meanwhile, claims that "There's no such thing as a debt ceiling" - based on a Philosophy 101-style argument that if a debt ceiling is constantly raised, is it really even a ceiling? (Whoa, dude. Deep.)

"We have 10 times as much tax revenue as we've got annual interest on the debt obligations," Rep. Mo Brooks (R-Alabama) told Politico. "So if the president does not want us to default on our credit or obligations, we won't."

"We are not going to default on the public debt. That doesn't mean that we have to pay every bill the day it comes in," Rep. Joe Barton (R-Texas) told CNBC.

So what bills would Rep. Barton and other GOP legislators pay? Priority would be given to Social Security checks and bond payments. Everything else would just have to wait.

The situation might not be immediately dire. The House majority, led by Speaker John Boehner (R-Ohio) has proposed a six-week limit increase to allow more time for negotiations over the biggest sticking point of the government shutdown - defunding Obamacare. That the idea has sprung up shortly after Koch Industries, a major Tea Party funder, has said it does not want to see a default is surely just a coincidence.

Democrats and the administration haven't agreed to the new terms yet, saying they would like a deal that reopens the government at the same time, but the talks have been labeled "good."

On the one hand, an extension provides more wiggle room to deal with the potential economic collapse that could occur if the U.S. does fail to make payments on its loans. On the other, the proposal explicitly forbids the Treasury from taking "extraordinary measures" to continue making payments after the government hits that ceiling.

For the Tea Party this new wrinkle could seriously hamper their messaging machine - which relies on the idea that default won't be that bad because the government will just pay some interest to keep the credit rating from tanking.

The "compromise" could be just as bad for those who hope to see the shutdown end. Kicking the debt ceiling fight down the road removes the urgency from passing a clean continuing resolution and getting the government fully running as soon as possible. For those who rely on the government for their salary, pension payments, social security, Head Start, WIC, veterans benefits, enrollment for small business loans, getting into clinical trials to cure diseases, having foodborne illnesses tracked or any other number of functions, six more weeks means the juggling of their own finances and decisions on which bills can be paid. Unfortunately, unlike the government, everyday Americans can't use funding gimmicks to keep their creditors at bay.

The Tea Party Republicans' Biggest Mistake

By Robert Reich, Robert Reich's Blog

12 October 13

epresentative Mo Brooks, Republican of Alabama and a fierce critic of the Affordable Care Act, has just changed his tune. He now says: "My primary focus is on minimizing risk of insolvency and bankruptcy. There are many paths you can take to get there. Socialized medicine is just one of the component parts of our debt and deficits that put us at financial risk."

Translated: House Republicans are under intense pressure. A new Gallup poll shows the Republican Party now viewed favorably by only 28% of Americans, down from 38% in September. That's the lowest favorable rating measured for either party since Gallup began asking this question in 1992. The Democratic Party is viewed favorably by 43%, down four percentage points from last month.

So Republicans are desperately looking for a way of getting out of the hole they've dug for themselves - and the President has given them one. He told them that if they agree to temporarily fund the government and raise the debt ceiling without holding as ransom the Affordable Care Act or anything else, negotiations can begin on reducing the overall budget deficit.

What's the lesson here? The radicals who tried to hijack America didn't understand one very basic thing. While most Americans don't like big government, Americans revere our system of government. That's why even though a majority disapprove of the Affordable Care Act, a majority also disapprove of Republican tactics for repealing or delaying it.

Government itself has never been popular in America except during palpable crises such as war or deep depression. The nation was founded in a revolution against an abusive government - that was what the original Tea Party was all about - and that distrust is in our genes. The Constitution reflects it. Which is why it's hard for government to do anything very easily. (I've never been as frustrated as when I was secretary of labor - continuously running into the realities of separation of power, checks and balances, and the endless complications of federal, state, and local levels of authority. But frustration goes with the job.)

No one likes big government. If you're on the left, you worry about the military-industrial-congressional complex that's spending zillions of dollars creating new weapons of mass destruction, spying on Americans, and killing innocents abroad. And you don't like government interfering in your sex life, telling you how and when you can have an abortion, whom you can marry. If you're on the right, you worry about taxes and regulations stifling innovation, out-of-control bureaucrats infringing on your freedom, and government deficits as far as the eye can see.

So when Tea Party Republicans, bankrolled by a handful of billionaires, began calling the Affordable Care Act a "wholesale takeover of American health care," many Americans were inclined to believe them. Health care is such a huge and complicated system, affecting us and our families so intimately, that our inherent distrust of government makes us instinctively wary. It's no accident we're still the only advanced nation not to have universal health care. FDR decided against adding it to his plan for Social Security because he didn't want to jeopardize the rest of the program; subsequent presidents never got close, at least until Obama.

The best argument for the Affordable Care Act is that our current healthcare system is so dysfunctional - the most expensive in the world with the least healthy outcomes (highest infant mortality, shortest life spans, worst rates of chronic disease) of any advanced nation - that we had no choice but to try to fix it. Even so, it's a typical American fix: It's still based on private health providers and private insurers. All government does is subsidize the poor, require insurers to take in people with pre-existing health problems, and pay for it by requiring everyone to be insured.

The Tea Party Republicans' mistake was to assume that Americans' distrust of big government, and, by extension, the Affordable Care Act, would allow them to ride roughshod over the process we have for making laws.

Their double-barreled threat to shut down the government and cause the United States to default on its obligations if the Affordable Care Act isn't repealed or at least delayed is a direct assault on our system of government: If even unpopular laws can be gutted by a majority in one house of Congress holding the rest of government hostage, there's no end to it. No law on the books will be safe. (Their retort that Congress holds the "purse strings" and can therefore decide to de-fund what it dislikes is bunk; appropriation bills have to be agreed to by both houses and signed into law by the president, like any other legislation.)

While most of us distrust government, we're indelibly proud of our system of government. We like to think it's just about the best system in the world. We don't much like politicians but we canonize the Founding Fathers, the Framers of the Constitution. And we revere the fading parchment on which the Constitution is written. When we pledge allegiance to the United States we bind ourselves to that system of government. Anyone who seeks to overthrow or undermine that system is deemed a traitor.

And that's exactly what some Tea Partiers have begun sounding like - traitors to the system, radicals for whom the end they seek justifies whatever means they think necessary to achieve it. As such, they began losing support even among Americans who had bought their view of the Affordable Care Act.

So they've had to back down, and soon, hopefully, we can move to the next stage - negotiating over the size of government. That should be stronger ground for the Tea Partiers. But the President, Democrats, and any moderate Republican who dares show his face can still gain ground by framing the question properly: The size of government isn't the real issue. It's who government is for. The best way to reduce future budget deficits is to ensure it's for all of us and not just a privileged few.

That means revenues should be raised from the wealthy, who have never been wealthier - limiting their deductions and tax credits, closing loopholes like "carried interest," and taxing financial transactions. Spending should be cut by ending corporate welfare - terminating tax subsidies to oil and gas, ballooning payments to agribusiness, sweetheart deals for military contractors, and the "too big to fail" subsidy for Wall Street's biggest banks. Future health-care costs should be contained by using the government's bargaining leverage over providers (through Medicare, Medicaid, and the Affordable Care Act) to force a shift from fee-for-service to payments-for-healthy-outcomes. And we should spend more on high-quality education and infrastructure for everyone.

Americans distrust big government, and always will. There's ample reason - especially given the huge sums now bankrolling politicians, coming from a relative handful of billionaires, big corporations, and Wall Street. But we love our system of government. That's what must be strengthened.

By using tactics perceived to violate that system, the Tea Partiers have overplayed their hand. If they don't stop their recklessness, they'll be out of the game.

Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.