After urging Republicans to shut down the government in an effort to defund the Affordable Care Act (also known as the ACA or Obamacare), conservative media figures are selectively outraged at some consequences of the government shutdown.
Fox News continued to hype the myth that the debt ceiling raises the national debt, smearing President Obama's comments at an October 8 press conference as false. In reality, the debt ceiling does not raise the debt or authorize additional spending, but instead enables the U.S. government to finance existing legal obligations.
A Wall Street Journal article promoted false Republican claims which disputed the devastating effects failure to raise the debt ceiling on October 17 would have on the U.S. economy, despite recent Journal reporting which admitted default could have "cataclysmic" consequences.
In an October 9 article headlined "Obama's Default Scenario Derided," the Journal noted that according to President Obama, "if Congress doesn't raise the country's debt ceiling soon, an economic crisis with skyrocketing interest rates and a crashing stock market could follow," as the U.S. would default on its pre-existing debts -- an understanding of the manufactured impending fiscal crisis which is supported by economists and the Treasury Department.
But rather than confirm this factual assertion, the Journal instead provided a platform for Republicans who baselessly "say they don't believe" default will lead to devastating negative effects and have even "questioned what the word 'default' really means." The Journal hyped Republican claims that the White House could choose to prioritize which payments to make once the deadline hits, and claimed these misleading remarks had credence because the U.S. has never defaulted before, making the potential crisis "unchartered waters."
In reality, the Treasury Department does not have the legal authority to prioritize payments if the debt ceiling is not raised, and economists agree that congressional failure to raise the debt limit could be catastrophic, setting in motion a financial crisis in the United States and around the globe.
The "debt ceiling" was officially breached on May 17 of this year. Since that date, the Treasury has implemented "extraordinary measures" to avoid defaulting on American sovereign debt obligations by shifting funds from various accounts. The New York Times reported that these measures will be exhausted by October 17:
Economists of all political persuasions have warned that a failure to raise the debt ceiling by the Treasury's deadline of Oct. 17 could be catastrophic. The world economy's faith in the safety of Treasury debt would be shaken for years. Interest rates could shoot up, and stock prices worldwide would most likely plummet.
The Journal itself has previously reported the devastating consequences the prospect of default is already having on the worldwide economy. On October 8, the Journal reported that short-term U.S. debt prices had fallen "amid rising investor concern about the prospect of a government-debt default, sending the yield on one-month U.S. Treasury bills to its highest level since the financial crisis." The same day, the Journal reported that China had warned the U.S. of default's "global ramifications," and that banks in the United Kingdom have begun "stockpiling cash" and preparing for "cataclysmic" consequences.
Domestically, money for government employees, the military, Social Security, Medicare, food safety inspections, and more could cease or be delayed, and CNN business correspondent Alison Kosik reported that "if a default happens, there's one analyst who says that the S&P 500 could drop 45 percent."
Furthermore, the claim that the administration could choose to prioritize some payments over others in order to avoid default is false. Tony Fratto, a former Treasury Department assistant secretary and senior George W. Bush White House staffer called payment prioritization "fanciful," and Treasury Department Inspector General Eric M. Thorson reported to Congress that the Treasury had no means or capacity to prioritize certain payments over others. Slate economics blogger Matt Yglesias explained that Treasury has "no more legal authority to prioritize payments than they do to borrow extra money."
From the October 8 edition of MSNBC's All In with Chris Hayes:
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CNN host Erin Burnett attempted to downplay the consequences of reaching the debt ceiling, ignoring both the reporting of her CNN colleagues and experts who warn that passing the debt ceiling would result in default and economic harm.
On the October 8 edition of CNN's OutFront, Burnett argued that the conversation around reaching the debt limit had become "hyperbolic," claiming "experts tell us you can reach the debt ceiling without defaulting on the debt" because "if the debt ceiling is breached, there is enough money to fund half to two-thirds of the economy." Burnett repeated one economist's claim that "The bottom line is there is enough money coming in to pay the interest on the debt, the military, and up to two-thirds of government activity":
Earlier in the day, however, CNN anchor Christine Romans argued against proponents of prioritization, saying: "You hear people like Congressman Ted Yoho and others talk about, you know, 'Oh, they'll just have to prioritize.' You can't. There's not enough money that we finance the operations of the government. It would be instant austerity that many economists say could send us into a recession if they don't work this out":
Experts have also pointed out that the prioritization plan Burnett pushed would not prevent default. Deputy Treasury Secretary Neal Wolin wrote in a Treasury Department blog that prioritizing debt payments "would not actually prevent default":
While well-intentioned, this idea is unworkable. It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment. Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments. It would therefore bring about the same catastrophic economic consequences Secretary Geithner has warned against.
A Business Insider post also pointed out: "It's not true that on all days the Treasury has more money coming in than it has to pay out. ... The U.S. might be able to prioritize for a few days, but come November the U.S. would have to pay way more than was coming in that day, and we'd have a real breach no matter what." The post included a chart that compiled data from Goldman Sachs and the Treasury Department, showing that by early November, the combination of headroom under the debt ceiling and cash balance would reach zero by early November:
Another of Burnett's CNN colleagues pointed out that the consequences of reaching the debt ceiling would have a devastating effect on the stock market. During the October 8 edition of The Lead, CNN business correspondent Alison Kosik responded to a question about the debt ceiling's effect on the economy by noting that "if a default happens, there's one analyst who says that the S&P 500 could drop 45 percent":
From the October 8 edition of Fox News' The Five:
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From the October 8 edition of Premiere Radio Networks' The Sean Hannity Show:
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In the first week of cable and broadcast nightly news coverage of the ongoing government shutdown, networks largely failed to report the effects on low-income Americans, instead opting for discussions of political leverage and national park closures.
Fox News legal analyst Andrew Napolitano falsely claimed that failure to raise the debt ceiling would only affect discretionary spending -- something he said "we don't really need as a country." This ignores the importance of discretionary programs and the far-reaching impact that failure to increase the debt ceiling would have.
CNN host Jake Tapper advocated the Republican piecemeal budgeting approach by claiming there is "no principled reason" for Democrats to oppose the strategy. But piecemeal funding keeps the government from fully functioning and ignores those who lack the clout to get their programs funded in that manner.
After failing to avert a government shutdown by passing a budget, House Republicans adopted a "piecemeal" approach, attempting to pass budgetary items individually. During an October 7 CNN special on the government shutdown, host Jake Tapper argued that "there is no principled reason I can see" for Democrats to oppose the GOP's approach, claiming it's "just that Democrats don't like the politics." Earlier in the show, Tapper asked Rep. Chris Van Hollen (D-MD) to explain Democrats' votes to provide funding for military salaries and back pay for furloughed workers.* Tapper later claimed it's "not a principle to say, 'Well, we want to do it all at once'":
But the GOP's piecemeal budgeting efforts have faced widespread criticism. Think Progress found that "The government has not typically been funded by temporary extensions, or continuing resolutions (CRs), but through full budgets." The Iraq and Afghanistan Veterans of America also criticized the piecemeal method. Tom Tarantino, Chief policy officer for IAVA, explained that "The only way to solve this problem is to restart the government" because of the shutdown's disproportionate effects for veteran employment. The Center for Science In The Public Interest (CSPI) opposed the House bill H.J. Res 77 which would fund parts of the government but not others, explaining that "food safety requires the concerted effort of 13 different agencies" so "Opening FDA alone would not be enough to protect the public from potential risks." CSPI continued:
FDA works with the Centers for Disease Control and Prevention and the U.S. Department of Agriculture to identify and locate the source of a foodborne illness outbreak.
Besides the FDA, CDC, and USDA, the Department of Commerce's National Oceanic and Atmospheric Administration examines seafood for safety and quality, the Environmental Protection Agency regulates the use of pesticides, and the Department of Homeland Security coordinates all those agencies' security activities.
From the October 7 edition of Fox News' The Five:
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From the October 7 edition of Fox News' America's News HQ:
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Fox News and right-wing blogs falsely claimed that the federal government turned off Amber Alert, the child abduction broadcast service, because of the government shutdown. In fact, there have been several Amber Alerts since the shutdown began October 1 -- only a Justice Department website listing them has been shut down, along with the websites of many other federal agencies due to a lack of funding.
Before Republicans caused a government shutdown beginning October 1 by refusing to fund the government unless Democrats accepted unrealistic demands, media reports explained that numerous federal government websites would go offline or would not be constantly updated as a result.
A week later, right-wing media are highlighting the unavailability of the Justice Department's AmberAlert.gov website to falsely claim that the government "shut off" the Amber Alert program. On October 7, Fox & Friends co-host Steve Doocy said "if somebody goes missing, and an Amber Alert should be issued, it won't be" due to the website not being available. Fox Nation's headline read: "Amber Alerts Cancelled: WH First Targets Veterans, Now Targeting Children, in Shutdown." A Breitbart.com blog post claimed in a headline, "Amber Alerts Shut Off." And the Washington Examiner claimed that "somebody, somewhere in the Obama White House or the Obama Justice Department decided to shut down the Amber Alerts."
Contrary to the right-wing media's claims, Amber Alerts have continued to be issued since the shutdown began. On October 5, an Amber Alert in Miami, Florida for a missing two-year-old was made and then canceled. An Amber Alert was issued in Galveston County in Texas on October 5 for four children, but was later canceled when the children were found safe in Tennessee.
The government shutdown and the suspension of Justice Department websites did not stop Amber Alerts. As California Highway Patrol officials explained to a NBC affiliate reporting on the shutdown of the Amber Alert webpage, local law enforcement agencies will still alert local media outlets about an Amber Alert.
UPDATE: The Justice Department's Amber Alert website AmberAlert.gov has been restored. A link on the website to view active Amber Alerts shows that this website does not post any active Amber Alerts. A Justice Department spokesman explained on Twitter that "[a]t no point has AmberAlert system been interrupted during shutdown":
Major media outlets are pushing the narrative that the United States Department of the Treasury could prioritize payments to bond holders and select groups of recipients in lieu of an increase of the federal borrowing limit, also known as the debt ceiling, beyond October 17. This ignores Treasury Department officials and other experts who explain such prioritization is unworkable and legally dubious, and that default would still happen.
From the October 6 edition of Fox News' Media Buzz:
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