Brit Hume Again Asserts U.S. Could Pay Our Debt Obligations And Allow Government Programs To Go Unfunded

Another Sunday, another week with Brit Hume and Bloody Bill Kristol repeating dangerous falsehoods on Fox News Sunday. Just last month, Brit Hume made this same assertion and now we can add Bill Kristol's hackery to the mix on whether Republicans
up

Another Sunday, another week with Brit Hume and Bloody Bill Kristol repeating dangerous falsehoods on Fox News Sunday. Just last month, Brit Hume made this same assertion and now we can add Bill Kristol's hackery to the mix on whether Republicans can continue to play a game of chicken on raising the debt ceiling.

For a reminder, here was Hume back in mid-May -- Brit Hume Admits We'll Never Default on Our Debt, But Thinks it Would be Alright to Let the Rest of the Government go Unfunded. This week Bill Kristol suggested that the Republicans could possibly offer to just temporarily raise the debt ceiling, as though that would not cause the markets to panic and economic damage just as defaulting would.

Bill Kristol also apparently thinks that the House can pass legislation on its own after making this statement at the end of the segment:

WALLACE: Let me ask you a question, Bill. If the Hume scenario were to play out, and we get in the final week, and the Social Security Administration says --

HUME: Or some other agency.

WALLACE: Right. But says, you know, we're going to run out of money and your checks may be late, does that give Democrats the upper hand? Do the Republicans end up at the last moment at a disadvantage?

KRISTOL: Well, the House should pass legislation, then saying here is what you should pay for from the revenues that are coming in. You should pay off the debt. You should pay the military. You should pay Social Security. You should pay Medicare.

They should prioritize.

Yeah, that's the ticket Bill. I'm sure that wouldn't cause any problems for our economy at all even if it were possible. Good grief. As Karoli and Nicole already noted on this debt ceiling debate, it's just more lies and more kabuki theater.

Full transcript below the fold.

WALLACE: So let's start with a question, Brit, that I asked Senator Kyl a little bit earlier. Given where Republicans stand on spending and where Democrats stand on taxes, what is the basis for a deal?

HUME: Well, these kinds of impasses were inevitable on this issue. And this is another stage in the negotiations.

I think that the Democrats have brought up this tax question to give them a bargaining chip in the discussions about what spending to cut. The truth of the matter is, if it were left to the Democrats, they would do it all with taxes, there would be no spending cuts of any consequence. It wouldn't work, it wouldn't help the economy, and the debt would continue to balloon, which is now, I think, become politically untenable and even economically untenable.

So, my sense about this is that you can't get a tax increase through the House. But in the end, it's conceivable that there might be some loophole closures and so on that would constitute a form of tax reform that you could incorporate into a deal on this that would give the Democrats the ability to say they got something in exchange for spending cuts that they plainly do not want to make.

WALLACE: Kirsten, with the Democrats saying we're not going to about tax rates, we give up on that, we're talking about $3 in spending cuts for every $1 in tax increase, isn't that going to make it hard for Republicans to say no?

POWERS: Well, see, I think because they're focusing on things that most Americans are not going to have a lot of sympathy for if the Republicans oppose, so they are saying let's cut these tax loopholes for corporate jets. You know, the oil and gas industry, people who aren't particularly sympathetic.

And so, that's what they are putting out instead of raising taxes. And I think what could end up happening is that they're going to have to do some sort of deal where they get some votes from Democrats and they get some votes from Republicans.

They are not going to get something that the Republican Party is going to go for, because the Democrats are saying you've got to give us something on closing these loopholes. And they're going to have to find a way to meet in the middle.

WALLACE: How do they meet in the middle then?

KRISTOL: I don't know. And I have just personally been radicalized on this in the last couple of months. And maybe you can call me a flake if you want.

(LAUGHTER)

WALLACE: I simply asked the question.

KRISTOL: No, that's OK.

WALLACE: It's a perfectly sensible answer.

KRISTOL: She gave a good answer. I'll associate myself with her, on this issue at least, as a flake, because I don't really know why the Republicans should negotiate.

President Obama is the president of the United States. They raised the debt ceiling three times when they had a Democratic majority in Congress. Nothing -- no conditions, just $3 trillion more debt. Now they want $2 trillion more debt for the next 16, 17, 18 months. Most of the American public thinks, really, we're $14 trillion in debt and you're supposed to spend $2 trillion more? He the president. Let him explain what cuts he wants and what tax increases he wants. And let him go first, and let him lay it out, and then we can have a debate, Republican can propose an alternative.

All this negotiating and hinting and leaks, I'm not sure that's the right way to do it. And if they don't come to a deal, just extend it for a month and take some cuts right off right then, and tell the president we are doing the responsible thing here. We want to cut out a whole bunch of federal programs.

WALLACE: In the international market, if they say, well, we're going to just extend the debt ceiling for a month, that's not going to have some blowback?

KRISTOL: No.

WILLIAMS: Well, I don't know what economist he's talking to, but let me just you --

(CROSSTALK)

WILLIAMS: You know what? I just hate to mention it, but the bond ratings will be tremendously impacted. Interest rates will -- the value of the dollar would go down. Right?

These are bad things for the U.S. economy. The fact is that there might be a -- it might precipitate a global economic recession, a double-dip recession. Is that good for Republicans or Democrats? It's not good for anybody.

KRISTOL: We've had a global economic recession --

WALLACE: Go ahead, Bill.

KRISTOL: That's OK. I'm just saying, if you think increasing debt is a recipe for avoiding a global recession --

WILLIAMS: Let me ask you something. Did Ronald Reagan raise the debt limit? Did George W. Bush, George H. W. Bush? They all raised the debt limit.

(CROSSTALK)

HUME: Juan, we were not nearly as deep in debt as we are now. The public had not raised the alarm the way the public has now on this issue.

All this talk about markets going -- being roiled and going crazy and it triggering a recession is based on the idea that we would somehow default on our debt obligations, our loan repayments. But there will always be a stream of tax revenue from withholding coming in that would easily enable to us cover those obligations. But there is a problem that relates to government programs, not government debt.

WALLACE: Right.

HUME: Government programs.

WALLACE: Right.

HUME: And if there was no extension of the debt limit, the tax revenues would not be sufficient to cover all of those government programs. And this gives the White House and the Treasury Department some leverage, political leverage, to pick and choose which programs to shut down, and then send out warning letters to the people affected by it and saying because, you know, the Republicans refuse to extend the debt ceiling the payments to this -- or this and that program will stop..

WILLIAMS: Wait a second. This is hype.

HUME: Juan, I'm not hyping anything.

WILLIAMS: I was going to give you some hype. The hype is this -- you're going to send a letter to our soldiers saying you're not going to get paid? You're going to send a letter to Social Security recipients and say, I'm sorry, you're not getting paid this month?

HUME: Yes. It's exactly the possible scenario.

(CROSSTALK)

WILLIAMS: That's terrible. That's not the way to do business.

HUME: I agree with you about that. However, how many Republicans on Capitol Hill, faced with a blowback from warning letters of that kind from the federal government, are going to refuse then to extend the debt ceiling? That's the question.

WILLIAMS: Oh, so you're saying Republicans should extend the debt ceiling?

HUME: What I'm saying is that, in the end, if comes down to it, extend the debt ceiling or not.

WALLACE: At their own risk.

Kirsten, would you like add to the conversation?

POWERS: Well, I'm with Juan. And I think it absolutely would be horrible for the United States. We would default on our debt.

HUME: We wouldn't default on our debt.

WALLACE: Let Kirsten talk.

POWERS: We most likely would be defaulting on our debt. It would be sending a horrible message to the rest of the world that we can't be counted on to do what we say we are going to do. And I don't think -- no politician is going to be sending letters to Social Security recipients telling them that they're not going to get their benefits. I mean, it's --

HUME: The Social Security Administration would send them. But the Social Security Administration --

POWERS: But that's why the debt limit is going to be raised.

WALLACE: Let's let Mr. Kristol bring some order to this circus.

KRISTOL: Well, I guess it's great. You know, we'll just raise it by $2 trillion -- by a trillion dollars a year -- forever because, everyone is going to say the markets are going to panic, we can't cut any government programs, we're going to let whatever administration is in power demagogue by sending letters to Social Security recipients or families of soldiers.

WALLACE: Let me ask you a question, Bill. If the Hume scenario were to play out, and we get in the final week, and the Social Security Administration says --

HUME: Or some other agency.

WALLACE: Right. But says, you know, we're going to run out of money and your checks may be late, does that give Democrats the upper hand? Do the Republicans end up at the last moment at a disadvantage?

KRISTOL: Well, the House should pass legislation, then saying here is what you should pay for from the revenues that are coming in. You should pay off the debt. You should pay the military. You should pay Social Security. You should pay Medicare.

They should prioritize.

WILLIAMS: The GOP is going to get hit hard on this if they think that's the winning hand.

WALLACE: Thank you, panel. See you next week.

About Heather

Comments

We welcome relevant, respectful comments. Please refer to our Terms of Service for information on our posting policy.