Hayes Slams Boehner for Wanting to Pay China First if U.S. Nears Default
MSNBC's Chris Hayes slammed House Speaker John Boehner and the Republican party for being foolish enough to play a game of political suicide with this latest proposal of theirs called the Full Faith and Credit Act, which would, as Democrats have rightfully been going after them for, mean that the United States would pay China before paying our troops if Republicans decide to keep playing more games on raising the debt ceiling.
House Speaker John Boehner (R-Ohio) on Tuesday essentially agreed with Democrats' arguments that a Republican bill to prioritize debt payments would put China before U.S. troops -- except he suggested that would be a good thing.
During an interview with Bloomberg TV, Boehner was asked about this week's vote on the Full Faith and Credit Act, which, in the event that the U.S hits its debt ceiling, would direct the treasury secretary to pay only the principal and interest owed to bondholders before making any other payments. Money for other payments, such as those for veterans, Medicare and national security, would have to be divvied up from what remained of the scarce federal funds.
Republican supporters of the bill maintain that the most important thing is that the nation won't default on its credit as as long as those interest payments are made on time.
"Our goal here is to get ourselves on a sustainable path from a fiscal standpoint," Boehner said. "I think doing a debt prioritization bill makes it clear to our bondholders that we’re going to meet our obligations."
When show host Peter Cook asked if Boehner's comments mean that, as Democrats have suggested, Republicans are basically choosing to pay China before paying U.S. troops, Boehner didn't disagree.
Republicans never cared about blowing mile wide holes in our budget until we got ourselves a Democrat elected as President. Now they're continuing to be willing to play with the full faith and credit of the United States government over a budget mess they helped to create to score political points with their wingnut base.
Rough transcript of Hayes letting them have it for this not only being bad policy, but really, really stupid politically below the fold.
HAYES: Yesterday the Republicans, with very little fanfare, took a vote that strikes me as complete and total political suicide. The vote was on the Full Faith and Credit Act, which is a Republican attempt to essentially strengthen their bluffing position in their latest effort to blow up the economy, by threatening to slam through the debt ceiling.
In order to take off the edge off warnings that default will bring about financial apocalypse, the Republicans are saying, no, no, no, not financial apocalypse.
REP. MCCLINTOCK: There is one thing that could do even more damage than delaying payments on our other bills, and that is the threat of a default on our sovereign debt. This measure takes that threat off the table.
HAYES: Oh, but not true. Even if this bankruptcy-like payment scheme worked, as Republicans claim, the country would still go into default. Which is why economists have called possible efforts of paying some creditors over others the financial equivalent of that Hieronyous Bosch painting of hell and why Congressman Chris Van Hollen called the just passed Full Faith and Credit Act a harebrained idea.
Ah, but it gets worse. What we'll do if we blow through the debt ceiling, according to Republicans, is simply prioritize who gets paid. And here's how Republicans want to prioritize who gets paid. – Social Security recipients and bond holders.
And if there's any money left, which there wouldn't be, that could go to everyone else. Everyone else being, you know, active service duty members, veterans, Medicare recipients, food safety inspectors – nothing important, mind you. But House Speaker John Boehner is not concerned about the political ramifications.
COOK: Does this mean as Democrats have basically suggested that you're basically choosing to pay China before you pay U.S. troops?
BOEHNER: Listen. Those who have loaned us money, like in any other proceeding, if you will, court proceeding, the bondholders usually get paid first. Same thing here.
COOK: And you're not worried about the politics of this.
BOEHNER: No, not at all.
HAYES: The bond holders get paid first, to which House Minority Whip Steny Hoyer correctly said “Just yesterday Speaker Boehner admitted this bill means the United States will voluntarily act like a bankrupt corporation and pay China before we pay our troops.
Democrats are calling it a Pay China First Act, which is actually, sort of uncomfortably xenophobic for my taste and also a little misleading. It's not just the Chinese who own American bonds. Most debt is in fact held by ourselves, including state and local governments.
However, nearly fifty percent of public debt is held in the form of external debt, China being the biggest holder. As you can see, there are also oil exporters, Caribbean banking centers and Russia. Still, these thirty second ads really do right themselves.
After giving his version of what some of those ads might look like, Hayes wrapped things up.
HAYES: My favorite thing about this bill is this. I have never seen a purer distillation of the base of the Republican party than this bill. I mean, think about the Boehner quote, right? Just like any bankruptcy proceeding, the bond holders get paid first.
That should be the motto for the Republicans in the midterm elections. Bond holders get paid first. I mean, who is the republican base? It's old folks on Social Security and bond holders.
If you want to talk about what is the moderate Republican party, it is a creature of a demographic base, based on Social Security and a financial base of bond holders. That is the party we're talking about – and they just went to the floor of the United States House of Representatives and said, you know what, when the bleep hits the fan, our two groups are getting taken care of, so screw the rest of you.
Subtlety hasn't been one of their strong points for a long, long time now.
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