It will be foolish to rush into a debt ceiling deal that fails to curb spending.
Polls show the nation growing impatient. The public wants Washington politicians to get a deal done now to raise the debt ceiling and open the government. Rushing is a mistake. The urgency of the debt ceiling is exaggerated, while the drastic consequences of a deal that fails to curb spending are being ignored.
Here are three reasons not to rush a settlement:
1. The U.S. will not default on its debt this week or anytime soon.
On October 7, Moody’s rating agency circulated a memo on Capitol Hill explaining that “there is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.” First of all, “there are no interest payments until the end of the month…. Thus, a Treasury based default is not technically possible until that date.”
What’s more, “the government is very likely to prioritize interest payments,” meaning servicing the debt before paying other bills.
Backing up Moody’s analysis, Fitch rating service called default “a low risk.”
Yet Rep. Peter T. King, Republican of New York, said “We’re now backed into a corner. We have to do this by Thursday. We have to make it work, but it’s not going to be perfect.”
No one expects perfection in politics, but Republicans should be fighting to keep the “savings” they gained in 2011, in exchange for agreeing to the largest debt ceiling hike in history.
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