The looming fight over ‘debt prioritization’

Updated
 

The question isn’t whether congressional Republicans will launch another debt-ceiling crisis; it’s what they’re prepared to write on the ransom note. GOP leaders, including Senate Minority Leader Mitch McConnell yesterday, now freely admit that they intend to hurt Americans, on purpose, unless Democrats agree to give Republicans some kind of treat. The intra-party debate is, at this point, over what to put on their “wish list.”

But in the meantime, there’s a more immediate fight over “debt prioritization.”

Democrats on the House Ways and Means Committee put together this video, highlighting House Speaker John Boehner’s (R-Ohio) interview with Bloomberg’s Peter Cook yesterday. For those who can’t watch clips online:

COOK: Doesn’t it mean, as Democrats have suggested, that you’re basically choosing to pay China before you pay U.S. troops?

BOEHNER: Listen. Those who have loaned us money, like in any other proceeding, if you will, court proceeding, the bond holders usually get paid first. Same thing here.

COOK: And you’re not worried about the politics of this?

BOEHNER: No. Not at all…. If it comes to the point where they don’t have enough money to pay all the bills, here is some order that we think is sound.

At issue here is a proposal, which may receive a House vote as early as this week, to figure out what happens if Congress chooses not to act and the nation pierces its debt ceiling for the first time in American history. Instead of working on a plan to avoid disaster, House Republicans are investing their time and energy into a plan to deal with the disaster after they ensure it strikes.

In other words, the GOP proposal is a response to the lingering question: what happens if Republicans hold the nation hostage (again) and are forced to pull the trigger once Democrats fail to meet the GOP’s demands?

In effect, because Congress will have blocked the United States’ ability to borrow the funds necessary to meet our legal obligations, these House Republicans are looking to prioritize who’ll get paid first after the debt limit is breached. Under this radical vision, the nation will start by focusing on our bond holders and debt payments, paying them in full, and then using whatever money is left over to pay for literally everything else.

It’s why Democrats are going with the straightforward attack: Boehner and his party want to pay China before they pay U.S. troops. (For the record, China doesn’t own that much U.S. debt, making the talking point misleading, though the larger point about bond holders vs. domestic obligations is sound.)

For Boehner, this approach to debt prioritization would prevent a default, which is sort of true, but not entirely – the United States has passed laws obligating the government to pay for plenty of other things, and we’d almost certainly have to default on those obligations unless the debt ceiling is raised as it always has been.

Bottom line: congressional Republicans are playing an incredibly dangerous game, for no particular reason, and with no meaningful policy goals in mind. It’s all so blisteringly stupid that it’s almost hard to believe a group of American elected officials would be willing to think this way. And yet, here we are.

Of course, Boehner’s debt-prioritization bill will not become law – the White House formally issued an unequivocal veto threat yesterday – but the fact that this is what House Republicans are choosing to spend their time on is a reminder of just how far gone they really are.

Debt, John Boehner and Debt Ceiling

The looming fight over 'debt prioritization'

Updated