Rep. Pat Toomey (R-Penn.) introduced some legislation last week, S163, the “Full Faith and Credit Act,” that confirms one’s suspicion that some of the folks who have been entrusted with our fiduciary well-being have a very shallow understanding of economics. The legislation would, as TPM’s Brian Beutler describes it:
… force the U.S. government to reroute huge amounts of money to China and other creditors in the event that Congress fails to raise its debt ceiling. …
If passed, Toomey’s plan would require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury — that is, if the U.S. hits its debt ceiling. …
At times Toomey speaks as if attaching such a big stick to the debt ceiling would force Democrats to go along with the outrageous cuts in spending that Republicans are trying to ram down our throats (remember that phrase?).* At other times, he seems to think that this bill would itself put to rest the argument that failure to raise the debt ceiling would cause the U.S. to default.* Go figure. Of course, it would do no such thing:
… his idea is unworkable,” said Deputy Treasury Secretary Neal Wolin in a statement. “It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment. Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments.
And the punch line? Among the 18 co-sponsors in the Senate, we find our own Roy Blunt. The same Roy Blunt whose campaign ads fear-mongered about Medicare cuts. Guess what this bill aims to do? If you guessed cut Medicare you’re right – and you can throw in Social Security, Defense, you name it, for good measure.
HR421, the companion legislation that Rep. Tom McClintock has just filed in the House, counts among its 15 co-sponsors Blunt’s successor in the House, Billy Long, who is the first, and currently the only Missourian to sign on – a situation that, given the general nuttiness factor in our GOP congressional delegation, will probably soon be rectified. Nevertheless, given that the early adopters, so-to-speak, in Missouri represent or have represented the same district in the House, one is tempted to think there might be something in that Ozark water that leads to the kind of foolishness that can justify giving priority to paying the Chinese and Japanese before Americans – or before simply raising the debt ceiling, something Republicans have been more than willing to do when there was a Republican in the White House.
* Edited slightly to clarify meaning.