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Shortly before House Republicans approved their debt ceiling hostage note, Rep. Tim Burchett came out of a GOP caucus meeting and told reporters not to worry too much about the United States defaulting on its debts. Asked why not, the Tennessean replied, “I think September’s the actual drop-dead date, so we’re good.”
As we’ve discussed, the Treasury Department had already told Congress that the deadline — the so-called “x-date” — will likely arrive in June, but there was Burchett, expressing confidence that the “actual” deadline is still months away.
This is, unfortunately, rather common. Axios reported last week:
Senate Republicans are deeply skeptical of Treasury Secretary Janet Yellen’s estimate that the U.S. will not be able to pay its bills as early as June 1 if Congress does not raise the debt ceiling. ... A firm deadline can be a forcing mechanism in any negotiations, especially on Capitol Hill. But deadlines only work if all the parties actually believe that they are real.
Last week, Treasury Secretary Janet Yellen jolted the political world with a letter to congressional leaders, explaining that U.S. default could be as early as June 1. The cabinet secretary, pointing to “inherently variable” federal receipts and outlays, added that the actual deadline could slide to “a number of weeks later.”
Republican Sen. John Kennedy told Axios about the Treasury secretary’s letter, “Nobody believes her. I don’t believe her. I’m not saying she’s a liar, I’m just saying Janet Yellen is no longer an economist and a professor — she’s a politician.”
The Louisiana politician — who, unlike Yellen, has a limited background in economic policy — added that he believes the actual deadline is “more like [the] end of July, sometime in August.”
It’s unclear how Kennedy arrived at this. By all appearances, the GOP senator seems to have just guessed. If he and his Republican brethren are wrong, and Yellen is right, the global economy will suffer severe consequences in part because GOP lawmakers were given a deadline they chose — on a hunch — not to believe.
To be sure, Yellen didn’t say that June 1 is the absolute line in the sand. She warned that, based on the available data, the United States might struggle to pay its bills “as early as” June 1, even as the Treasury secretary acknowledged that there’s some fluidity to the schedule.
And yet, there was a prominent Senate Republican, declaring on the record, in reference to the Treasury secretary, former Fed chair, and accomplished economist, “Nobody believes her. I don’t believe her.”
So let’s take stock. GOP lawmakers have been told that breaching the debt ceiling would cause a catastrophe, but they don’t believe the warnings. GOP lawmakers have been told the debt ceiling and government shutdowns are different things, but they keep getting the two confused.
And GOP lawmakers have been told that policymakers only have weeks remaining before the United States defaults on its obligations, and much of the party has decided not to believe that, either.
It’s awfully tough to be optimistic about the direction of this process.