As if attacking the Fed chairman and opposing expansionary economic policy wasn’t enough to give markets (and perhaps fundraisers) pause, it turns out Rick Perry, like a long list of right wing Republicans, downplayed the risk of allowing the country’s borrowing authority to lapse.
“There’s still gonna be revenues flowing in, so I think this threat that somehow or another the world is going to come to an end and the threat of, ‘We’re not going to be able to pay our bills’ is a bit of a stretch,” Perry told reporters in Houston. “[Americans] want the government to continue to function, they want our military young men and women to be paid on time. They want the programs out there that help the citizens of this country to be taken care of [but] most Americans know this: We’ve spent too much money. We’ve gotten our house in bad shape, and we need to stop spending.”
Unlike some Republicans, Perry didn’t downplay the consequences of a default on payment to U.S. creditors. But it’s contradictory to both downplay the risks allowing borrowing authority to expire and also support continuity of all government services and obligations. Without borrowing authority, the U.S. government would only have enough incoming revenue to pay for a bit over half of all the country’s expenses. So a ton of stuff — including some of the things Perry mentioned — would have to give.
On top, the disruption from a lapse of borrowing authority would have triggered economic consequences that would have made credit-destroying default more and more likely.
Perry also said he backed a radical GOP plan called “Cut, Cap, and Balance” which would have made raising the debt ceiling contingent on Congress passing a constitutional amendment to essentially cap spending and tax revenues at rates that would doom existing programs like Medicare and Social Security. A fair question, then, is whether the next Republican president would refuse to sign an increase in the debt limit without these limitations, or if it’s all posturing.
Watch:
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Brian Beutler
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at brian@talkingpointsmemo.com.
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