Senate Democrats

Upping Ante In Bid To End Medicare, House GOP Plays Down Potential Default Catastrophe As No Big Deal

Leader Cantor Becomes Highest-Ranking GOPer So Far To Join Default-Crisis Deniers, Says GOP Not ‘Fooled’ by August 2 Deadline

WASHINGTON, DC—House Majority Leader Eric Cantor on Wednesday became the latest and highest-ranking Republican so far to dismiss the looming threat of a U.S. default as no big deal, joining a chorus of Republicans who continue to downplay the fallout of a default as they seek leverage to impose their plan for ending Medicare.

“House Republicans are so fixated on imposing their plan to end Medicare as we know it that they are trying to wish away what every credit market analyst says would be an utter catastrophe for our economy,” U.S. Senator Charles E.Schumer said.

A round-up of recent Republican statements denying the consequences of a default appears below.


Washington Post; “Cantor is latest Republican to dismiss importance of debt-ceiling deadline for financial markets.” House Majority Leader Eric Cantor (R-Va.) told reporters in Richmond Wednesday that financial markets watching discussions over raising the nation’s debt limit are looking to see progress on cutting spending in Washington — rather than a resolution of negotiations by any deadline.  ‘What I think is that the markets are looking to see credible progress on changing the fiscal trajectory in Washington,’ Cantor said, after a job forum for local business executives at Virginia Commonwealth University. ‘The markets are not fooled by some date imposed to say that that is the trigger for the collapse.” [Washington Post, 5/18/11]

More Than One Hundred House and Senate GOPers Have Signed Onto Bill to Prioritize Payments of Debt Over All Other Spending, Including Troop Pay and Social Security. “Almost 100 House members and 22 senators have since signed onto Toomey’s Full Faith and Credit Act, which would require Treasury to first make interest payments on the debt. The bargaining positions of congressional Republican leaders have hardened. And the philosophy taking hold among conservatives is that if the country tips into a default, Geithner is to blame, not Republicans who held out for a better deal.”  [Politico, 5/17/11]

Toomey Not Worried About Negative Effects on Social Security Recipients or The Economy If Republicans Force Default. “Andy Sullivan of Reuters asked Toomey if he worried it ‘would push the country back into recession if, for example, we have to suspend Social Security payments.’ Toomey wasn’t worried. ‘I don’t think it’s going to have an adverse impact on the economy in the days, weeks or perhaps even months that this would continue,’ he said, allowing that ‘this is not an optimal arrangement indefinitely.’”  [Washington Post, 5/18/11]

·         Toomey: “I want to say categorically that is absolutely false: Failure to raise the debt limit upon the deadline submitted by the Treasury Secretary does not equate to a default on our debt at all.” [Washington Post, 5/18/11]

·         Toomey A US Default Would be not be a “Catastrophe.” “They acknowledge the administration will need to make deep and painful spending cuts but argue that Geithner can avert default if he prioritizes which bills to pay. It would be more like a partial government shutdown, Toomey said.   “That’s disruptive; that’s not optimal,” Toomey conceded in an interview. ‘But it’s not a financial crisis. It’s not a default on our debt. It’s not a catastrophe. It’s a disruption.’” [Politico, 5/17/11]

Republican Study Committee Chair Jim Jordan: “Keeping the debt ceiling at its current level would force Congress to prioritize spending, but it would not force a default on our debt.  The only thing forcing a default would be Treasury Secretary [Timothy] Geithner allowing such a catastrophe to take place.”  [Washington Post, 5/16/11]

Arizona Rep. David Schweikert: “The one acting like his hair is on fire is Mr. Geithner.  It’s absolutely silly. We have plenty of cash flow to pay debt, which means I’m trying to figure out how credibly the administration can keep using that language.”  [Politico, 5/17/11]