Fox's Ed Henry Hides The Danger Of Another Debt Ceiling FightJanuary 3, 2013 12:46 PM EST ››› KEVIN ZIEBER
Fox News correspondent Ed Henry concealed the fact that the debt ceiling battle last July damaged the economy. Economic experts agree that the Republicans' brinkmanship during the previous fight over the debt ceiling cost the economy significantly and that another fight over the borrowing limit could be even more costly.
In a segment on the House of Representatives' vote to choose a Speaker of the House, Henry reported that the president signaled he would not debate the debt ceiling because "he believes a year and a half ago when they had that last debate about lifting the nation's debt ceiling it was detrimental to the economy." Although Henry presented this as Obama's opinion, the Government Accountability Office estimated that "delays in raising the debt limit in 2011 led to an increase in Treasury's borrowing costs of about $1.3 billion in fiscal year 2011."
Henry went on to report that Republicans including Senator Mitch McConnell felt the debt ceiling was one of the only mechanisms the Republicans had to force more spending cuts without noting the economic damage the last debt ceiling debate actually caused.
Following the last debt ceiling fight, the credit rating agency Standard & Poor's downgraded the U.S.'s credit rating and released a statement citing "political brinksmanship" and the threat of default as "political bargaining chips" among its reasons for the downgrade. The Bipartisan Policy Center estimated that "the ten-year cost to taxpayers caused by the delay in raising the debt limit will amount to $18.9 billion."
Moody's Analytics, another credit rating agency, warned last June that a downgrade was possible if the debt ceiling was not raised and Congress came close to default.
Not only was the previous debt ceiling fight costly and unnecessary, but economic experts say that a similar standoff would be even more costly. The Center on Budget and Policy Priorities wrote that "the damage from the U.S. government defaulting on its obligations, even briefly, would be serious and lasting." The Washington Post's Ezra Klein warned that by holding up an increase in the debt ceiling to exact spending cuts, the GOP is threatening a "congressionally induced global financial crisis."
Henry's report failed to note any of the real damage to the economy caused by the last walk to the brink of default. Fox News loudly supported the previous GOP attempt to use the debt ceiling to reap spending cuts, encouraging a default if necessary.