Rep. Jim Jordan Thinks Default Would be Acceptable, But Doesn’t Want to Call it Default
Click here to view this media From C-SPAN’s Newsmakers, Rep. Jim Jordan (R-OH) thinks it would be perfectly acceptable to go past the hard deadline Treasury Sec. Tim Geithner gave the Congress for the absolute last date that the debt ceiling can be raised and if that means that we don’t pay part of our obligations, oh well, so be it. Grandma and grandpa have their Social Security checks stopped, that would be too bad, but it’s more important that we gut the government and take care of this manufactured crisis that we never worried about before a Democrat got elected president. This is unbelievably irresponsible and dangerous talk coming from yet another member of our United States Congress. Apparently we’ve got House members contemplating just how long they can drag this thing out since he admits that they were looking at what the date would be that Social Security checks don’t go out any more. After being reminded that even John Boehner “thought it could have disastrous economic consequences if this went past August 2nd”, Jordan shrugs it off and pretends that not getting the deficit reductions they’re demanding would somehow be worse than running either into or past the hard deadline Geithner gave for default. He also dismisses like a lot of them have whether August 2nd is the drop dead date or not, but admits that it would be some time in August even if it’s not exactly the 2nd. I’ll honestly be surprised if we don’t start seeing the bond markets reacting if they don’t get an agreement made within the next day or two and this clown thinks we could keep this game of chicken going for another few weeks. LERER: Do you think the country would default, that we would go into default if we pass this August 2nd? JORDAN: Remember, there’s a difference between default and not having enough money to meet all obligations that we’ve appropriated for, or passed in law to spend dollars on. On August 2nd there’s still going to be revenue coming into the Treasury. So, you know, would it possibly require Tim Geithner to make decisions about who gets paid first? Yeah. And, you know, I’d like to think the administration would say, well, obviously a default means you don’t pay the bond holders, so you’ve got to pay the bond holders first. And the bond holders are, I assume all of you have some kind of 401K invested in… all Americans have some kind of investment. LERER: And the Chinese… JORDAN: A host of folks own bonds. BRAWNER: So they would get paid first? JORDAN: Local governments have all kinds of, you know, municipal governments, county governments have all kinds, so meet bond obligations first, then you start going down, Social Security, our troops and you start making sure they get paid first, but, at some point, it may mean, folks who work in the federal government here in Washington, bureaucrats in Washington who work here, government employees, may have to wait a while to get paid. BRAWNER: Congressman, as you probably know, Social Security payments are made on the third of every month. JORDAN: Umm hmm. BRAWNER: The bipartisan policy center did an analysis of August 3rd, what happens if the debt ceiling isn’t raised. We have an income of $12 billion revenue coming in. We have $32 billion in committed spending on August 3rd. $23 billion of that is Social Security payments. JORDAN: Right. BRAWNER: And that assumes you pay, as you said, the bond holders first. How are you going to explain to a constituent that a bond holder got paid first, but they didn’t get their Social Security payment? JORDAN: Look, there’s… I understand we’ve got Social Security payments, and there’s another date, some of this played out I think on the fifteenth of the month, I forget what day it is exactly, where there’s another big obligation and the day they actually roll over the bonds and sell them each month. And I maybe have the wrong date. We have to see exactly when that is, but remember revenue is coming in. Decisions have to be made. And also, never forget the big problem. The big problem is the $14 trillion debt and the crisis that’s coming. So would that be tough? Sure. But I would rather have that difficult situation in there vs. the really big problem, which everybody knows is coming. So we have to try to get the plan in place that’s going to fix it long term. And again I keep coming back to it, but it’s, we think our plan, cut cap and balance is going to be the right approach STANTON: Do you think your leadership has the will to sort of face down that sort of a reality? JORDAN: I think it’s that important to the country and I do. I really do. Remember this too. While I understand August 2nd and what happens with Social Security payments remember Tim, remember the history here. Tim Geithner originally told us, he sent a letter to Congress back in I think January saying, of we’ve got to have this done by the first quarter. Then he said, no, we’ve got to have it done by May 16th. And now he’s saying August 2nd. So you’ve got to keep it in context too, of what the Treasury has told us for the last year. Now they’re saying, oh August 2nd is the hard date. There is obviously a hard date out there, but there is some flexibility in how this can work. And the idea that we’re going to default, is not an accurate use of the word. Um, there are more obligations than we’re going to have revenue for at some point in August eventually. LERER: Speaker Boehner on Friday said that he thought it could have disastrous economic consequences if this went past August 2nd. If he wrong too? JORDAN: Look, I said earlier, the ideal situation is to avoid any concerns in early or late August and avoid the big problems coming. But the big problem that’s coming is the most important. And that’s what the American people understand. So, um, we want to try to avoid both. And the way to do that is to put in place a plan that’s going to address both situations. Something… if we can get a good plan before August 2nd, I’m all for that. But if we have to past it to get the kind of plan that fixes the big problem, that’s what we need to do.
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Rep. Jim Jordan Thinks Default Would be Acceptable, But Doesn’t Want to Call it Default
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on July 11, 2011. Filed under