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Schatz: Threat of default ‘bad for everyone’

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U.S. Sen. Brian Schatz took to the Senate floor to denounce so-called “conservatives” for their willingness to put our economy and middle-class families at risk by shutting down the government and threatening to allow America to default

Text of the speech:

Thank you, Madame President. Yesterday, Senate Republicans rejected a cloture motion, on a strictly party line basis, for a simple measure to prevent default for the United States of America. This bears repeating.

Yesterday, we voted on whether or not to proceed to a bill to prevent default, and not one Senate Republican voted for it. I think it is fair to say that many of the Senate Republicans are operating in good fair and have a strong desire to get out of this mess, but they are concerned about embarrassing and undermining the Speaker of the House by moving too quickly on this measure.

Well, Madame President, “too quickly” came and went a couple of months ago. And worrying about undermining the Speaker of the House should not be our primary concern.

Given the crisis upon us, we should be singularly focused on protecting the dollar as the reserve currency, maintaining our ability to borrow at the lowest possible rate, and retaining our ability to solve problems as the greatest nation in the world.

The time for worrying about the implications for one or the other political party, or a faction within it, is long since passed. It is time to reopen the government, to pay our bills, to ensure the full faith and credit of the United States, and to return to the negotiating table on all of the challenges in front of us.

In short, it is time to get back to governing in the way that we should.

I would like to emphasize a point that is not made often enough about the current crisis and that is this: there is simply nothing conservative about the behavior of the House Republicans. Conservatives traditionally have been characterized by holding a respect for institutions, a focus on the needs of the private sector, and a desire to not waste money.

Are these principles being upheld or subverted by the actions of House Republicans?

First, with respect to our democratic institutions, the procedural violence being done to the United States Congress is hard to overstate in this case.

The idea that a faction of a party is demanding concessions in exchange for ceasing their infliction of pain on America is unbelievable.

Why? Because we are all Americans here, and we all want to do right by our country. So the idea that one party is willing to inflict terrible pain on our country — or else — was so beyond the pale that there is no rule against it because no one ever contemplated that a major political party would ever behave in such a way.

The assumption has always been that elected leaders would find a better way to stand up for strongly held beliefs than by threatening to bring the American economy to its knees. Up until now, that has been a safe assumption.

This is the least conservative behavior imaginable because it throws us into permanent crisis, unable to solve major problems, for the foreseeable future.

Second, conservatives traditionally have wanted to protect the free marketplace. Some default deniers surmise that maybe the United States government can service its debt while delaying other payments — that we can simply “prioritize.” The United States of America cannot do that.

Even if operationally possible, which the Treasury Department assures us it is not, it would cause such severe harm to markets and undermine our credibility so terribly that even talking like that may be doing damage to our economy.

In 2011, Congress’s delay in raising the debt limit forced the Department of the Treasury to take extraordinary measures to ensure that our government could pay its bills. GAO estimates that this raised Treasury’s borrowing costs by about $1.3 billion in fiscal 2011.

That’s $1.3 billion in added government costs just for coming close to defaulting. And, this does not include the lingering added costs to borrowing that continue beyond fiscal 2011.

It also does not include the wasted time and resources that these extraordinary actions meant. After all, this manufactured crisis took Treasury Department focus away from other important cash and debt management responsibilities.

The Bipartisan Policy Center projects that the full costs of that crisis — to the federal government alone, not to the economy, just to the federal government — will be around $19 billion over the maturity of the debt.

There is nothing conservatively virtuous about defaulting on what we owe. It will cripple free markets. It is “Russian roulette played with a bullet in every chamber.” There is nothing conservative about that.

Finally, there is the conservative principle about saving taxpayer dollars. Two points on this:

First, with the likely passage of the House bill to provide retroactive pay to federal employees, let me tell you what is happening — we are paying federal employees to stay home. We are paying our dedicated federal workers, who want to do their jobs, not to do their jobs.

This is not conservative; this is not liberal for that matter. It is upside down. We are preventing federal employees from doing their important work, like assisting small businesses and combating terrorism.

Let me be clear, federal workers did not cause this shutdown and should not lose pay because of it. That is why I cosponsored Senator Cardin’s bill to make sure they receive back pay when the government reopens.

Our nation’s furloughed public servants want to work, and many federal civilian employees are being required to work during this shutdown without pay.

While it does not make sense to punish federal workers for Congress’s dysfunction, it makes way more sense to simply reopen the federal government. Still, the House refuses to vote on a clean continuing resolution that could reopen the government tomorrow, but instead voted to give back pay after the shutdown ends. What is conservative about paying people to stay home?

Second, this shutdown is costing us money, not saving us money. In just the first week, it cost the economy $1.6 billion in lost economic output and is estimated to cost an average of $160 million each additional day. This is hurting small businesses and working families across the country, and it is completely avoidable.

Madame President, as you know people are in real pain, and this needs to stop. There is nothing good in this shutdown or in the threat of default.

As a progressive, I have talked on this floor about how it hurts our economy, the American people, and the priorities that I am fighting for. But you do not have to share my priorities to think this is an awful mess — you can be a rock ribbed conservative too; this is bad for all of us.

There is a simple way to move forward, Madame President. Open our government, pay our bills, and start negotiating on the issues that matter.

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Oct 21, 2014 / 12:46 pm

 

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