Ignoring The Past, Right-Wing Media Again Call For Intransigence Over Debt Ceiling
Research ››› ››› ALBERT KLEINE
Echoing their analysis from 2011, conservative media outlets have advised Republicans against raising the debt ceiling. The commitment to this narrative shows that the economic realities of the past debt ceiling debacle are being completely ignored by the right-wing media.
Flashback: Conservative Media Advice In 2011...
Fox Business' Napolitano: "I Think It Would Be" Advisable For Republicans To Not Raise Debt Ceiling. In a March 10, 2011 interview with David Walker, CEO of the Comeback America Initiative, Fox Business' Andrew Napolitano suggested that Republicans should not raise the debt ceiling. From The Glenn Beck Program:
NAPOLITANO: Would it be advisable -- and I think it would be, but challenge me if you disagree or support me if you agree -- for Republicans simply to say, no, Mr. President we are not going to raise the debt ceiling, we're not going to let you borrow any more money, you collect about $200 billion -- you know the number better than anybody in the planet Mr. Walker you collect $200 billion a month in revenue -- manage the government on that, that's what we hired you to do? [Fox News, The Glenn Beck Program, 3/10/2011, via Nexis]
Napolitano: "If I Were In The Congress, I Would Encourage Everybody To Vote Against Raising The Debt Ceiling." In an April 11, 2011 interview with Rep. David Schweikert (R-AZ), Freedom Watch host Andrew Napolitano stated, "If I were in the Congress, I would encourage everybody to vote against raising the debt ceiling." [Fox Business, Freedom Watch, 4/11/11 via Media Matters]
Fox News' Hannity: "I Would Not Vote To Raise The Debt Ceiling." During a panel discussion on his April 12, 2011 show, host Sean Hannity said, "If I was in Congress, I would not vote to raise the debt ceiling." [Fox News, Hannity, 4/12/11, via Nexis]
...And The Resulting Economic Fallout
S&P Sovereign Ratings Committee Chairman: Downgrade Due To Debate Over Debt Ceiling. In an August 5, 2011, Wall Street Journal article discussing Standard & Poor's decision to downgrade U.S. government debt, John Chambers, the chairman of S&P's sovereign ratings committee, cited political debate as a reason for their decision to downgrade. He claimed the "conclusion was pretty much motivated by all of the debate about the raising of the debt ceiling ... It involved a level of brinkmanship greater than what we had expected earlier in the year." [The Wall Street Journal, 8/5/11]
Roosevelt Institute's Jeff Madrick: "S&P Downgrade Brought On By Republican Obstructionism." In a post for the Roosevelt Institute where he is a senior fellow, former New York Times economics columnist Jeff Madrick wrote that the S&P downgrade was due to Republican obstructionism:
For all of S&P's handwringing about the nation's debt problems, Congressional recalcitrance was the driving issue. So when the press says neither the Democrats nor the Republicans can escape blame, it is in truth nonsense. The showdown caused the downgrade, not the nation's financial liabilities, and Republicans deliberately caused it in pursuit of their own political and ideological goals. [The Roosevelt Institute, 8/8/2011]
Bipartisan Policy Institute: Credit Downgrade Cost Taxpayers Billions. In a report on the economic consequences of the 2011 debt ceiling debate, the Bipartisan Policy Institute estimated that the S&P downgrade of U.S. debt will likely cost $18.9 billion over ten years due to elevated interest rates.
Lesson Not Learned: Conservative Media Advice Now...
Hannity: "Really Glad" That A Government Shutdown Could Occur. In a January 8 interview with Sen. Ted Cruz (R-TX), Fox News host Sean Hannity agreed with Cruz's suggestion that a government shutdown may be necessary in the coming debate over the debt ceiling:
HANNITY: You said something the other day that I was really glad you said. I think the Republicans were weak when it came to the fiscal cliff, I think they have a lot more leverage now with the debt ceiling. So my question to you is, you said they should be willing to shut the government down. [Fox News, Hannity, 1/8/2013]
Fox News' Perino: "You Don't Raise The Ceiling ... You Pump Out The Sewage." On the January 8 edition of Fox News' Hannity, Fox News host Dana Perino argued against raising the debt ceiling by saying:
PERINO: This is the analogy that I like. If you were to go home and found that there had been a sewage blockage in your basement, you don't raise the ceiling of the basement, you pump out the sewage. [Fox News, Hannity, 1/8/2013]
Wall Street Journal: Be Prepared To Take, And Shoot, The "Hostage." A January 4 Wall Street Journal editorial advised Republican members of Congress to take the debt ceiling "hostage," further arguing that they should be "prepared to shoot." From the article:
We'll support efforts to cut spending and reform entitlements, but the political result will be far worse if Republicans start this fight only to cave in the end. You can't take a hostage you aren't prepared to shoot. Do the two GOP leaders have a better strategy today than they did in 2011, and do they have the backbench support to execute it? [The Wall Street Journal, 1/4/2013]
...Which Could Again Cause Economic Catastrophe
Economists: Debt Ceiling Debate Could Sink Economy. In a Bloomberg article previewing the upcoming debate over raising the debt ceiling, economists Betsey Stevenson and Justin Wolfers argue that Republicans' unwillingness to raise the debt ceiling is "terrible economics." Furthermore, they claim that given concerns over the so-called fiscal cliff - which was only partially solved in early January - "the next debt ceiling battle could be even worse, because the stakes are even higher." [Bloomberg, 5/28/2012]
Council On Foreign Relations: Gridlock Could Negatively Affect Investment. In an article outlining the consequences of failure to raise - or simply the risk of failing to raise -- the debt ceiling, the Council on Foreign Relations noted that:
Many analysts say congressional gridlock over the debt limit will likely sow significant uncertainty in the bond markets and place upward pressure on interest rates. Rate increases would not only hike future borrowing costs of the federal government, but would also raise capital costs for struggling U.S. businesses and cash-strapped homebuyers. In addition, rising rates could divert future taxpayer money away from much-needed federal investments in such areas as infrastructure, education, and health care. [Council on Foreign Relations, 1/2/2013]
Financial Services Roundtable: "Markets Will Go Haywire." In a Washington Post article on the effect of not raising the debt ceiling, the Financial Services Roundtable warned that if a deal is not reached, investment could be negatively affected. From the article:
"We are in favor of raising it, and we will be encouraging policy makers to increase it," Scott Talbott, the senior vice president for public policy for the Financial Services Roundtable, told [author Greg Sargent] today. He added that the group was gearing up to communicate the demand for action to Congress, an effort that could include sending letters to every member. "We will communicate with the entire Congress," he said.
Talbott said the markets would go nuts if the debt ceiling were not raised. Interestingly, he noted that the markets had remained relatively flat heading into the fiscal cliff deadline, and said he expected the same as the debt ceiling deadline looms, because the markets now expect Congress to get these deals done at the drop dead moment.
"The markets have baked in the fact that Congress will make the shot at the buzzer," Talbott said. But he warned: "If they don't make the shot, the first trading day after, the markets will go haywire." [The Washington Post, 1/9/2013]
Bipartisan Policy Center: Failure To Raise Debt Ceiling Would Severely Cut Government Programs. A recent Business Insider article highlighted a Bipartisan Policy Center study that estimates the effect of failing to raise the debt ceiling. According to the article, if the debt ceiling is not raised, the Treasury will have to prioritize certain payments like interest on government debt, Social Security, and Medicare. The article provides a chart of essential programs that would not be possible to fund due to the inability to borrow:
[Business Insider, 1/7/2013]