Writing in the Wall Street Journal today, Sen. Pat Toomey (R., Pa.) dismantles the Obama administration’s doomsday narrative regarding what will happen if Congress fails to increase the federal debt limit. White House officials have suggested that if the debt ceiling isn’t raised, the country would subsequently default on its debt obligations, triggering an economic crisis of catastrophic proportions. That’s just not true, Toomey writes:
In fact, if Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt. Next year, for instance, about 6.5% of all projected federal government expenditures will go to interest on our debt, and tax revenue is projected to cover about 67% of all government expenditures. With roughly 10 times more income than needed to honor our debt obligations, why would we ever default?
…
If we do not raise it, the government’s tax revenue will enable us to fund roughly two-thirds of projected expenditures, including interest payments. Without the ability to borrow the other third, spending cuts would be sudden and severe: Projects would be postponed, some vendor payments would be delayed, certain programs would be suspended, and many government employees might be furloughed. Default would easily be avoided, but these cuts would certainly be disruptive. That’s why I hope we can avoid this scenario.
Instead, Toomey suggests that the upcoming vote gives Republicans an opportunity to insist on “concrete steps toward fiscal sanity” in return for raising the debt ceiling.
More here.