Senators Say the Darndest, Scariest Things About the Debt Ceiling

At a hearing with Treasury Secretary Jacob Lew, senators didn’t make anyone feel any better about the govern-by-crisis Congress.

Treasury Secretary Jack Lew testifies before the US Senate Finance Committee about the debt limit on October 10, 2013, on Capitol Hill in Washington, DC. 
National Journal
Matt Berman
Oct. 10, 2013, 7:15 a.m.

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.

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