Sen. Bob Casey, economist push bipartisan fix for nation’s debt

Bob Casey Jr. wants his fellow legislators to stop thinking about politics and do their jobs.

On Wednesday, the U.S. senator from Pennsylvania joined with economist Jared Bernstein to talk about the looming deadline to raise the nation’s debt limit, a showdown that has happened multiple times in recent years.

“I know many people in Washington have begun what will be a long conversation about the debt ceiling,” Casey told reporters in a conference call. “We should have more people willing to work in a bipartisan way to solve the problems.”

The problem is the impending shortfall in the U.S. checkbook versus bills that need to be paid.

“Based on our best and most recent information, we now estimate that extraordinary measures will be exhausted no later than Tuesday, November 3. At that point, we expect Treasury would be left with less than $30 billion to meet all of the nation’s commitments – an amount far short of net expenditures on certain days, which can be as high as $60 billion,” wrote Treasury Secretary Jack Lew in a letter to House Speaker John Boehner on Oct. 15.

According to Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a research think tank founded in 1981, the measure is not a new authorization for millions in more spending. Instead, it is a “matter of near term borrowing,” giving formal permission to borrow the money to pay the bills that have already been approved by the government.

“It’s incredibly hypocritical. (They are) basically saying they don’t want to pay for things they themselves have authorized,” Bernstein said.

The relatively routine procedure that has been done dozens of times by the government under both Democratic and Republican presidents has become a political tug of war with many of the current players, coming down to the wire in 2011 and 2013.

“This is an issue where folks should set aside their ideology and be focused on paying our bills,” Casey said.

While focused on the non-partisan needs, Casey – a Democrat from a famously political Pennsylvania family that included former governor Bob Casey Sr. – and Bernstein, a former adviser to Vice President Joe Biden, were both clear about where they were placing blame for the obstacle to passing the measure. They took shots at a GOP-proposed strategy, structuring payments to stagger what has to be paid versus what is due.

“Prioritization is simply the Republican word for default,” said Bernstein.

The Default Prevention Act bill was scheduled for a House vote on Wednesday.

“It simply provides that if the debt limit is reached, the Treasury Secretary may continue to borrow above that limit for the sole purpose of paying principle and interest that is due. It is an absolute guarantee that the debt of the United States will be honored,” sponsor Rep. Tom McClintock, R-Calif., said in a release. He dismissed Democrat criticism that the bill was focused on paying China first.

“What nonsense! More than half our debt is held by Americans, often in American pension funds. This act actually protects Americans far more than the Chinese or other foreign investors,” McClintock said when proposing the legislation on the House floor in February. “But whether our loans come from China or Timbuktu, from Grandma’s pension fund or Johnny’s savings bond, without the nation’s credit we cannot meet any of our other obligations.”

On that point, Casey and Bernstein agreed with him, although they took issue with whom the measure would leave out of payments.

“It is as much a default to not pay a private contractor, a Medicare doctor, a veteran, to not provide state and local governments money they have been promised, to not provide SNAP benefits,” said Bernstein. “Treasury makes 80 million payments a month. The idea that you can somehow prioritize a small group of those and yet somehow meet millions of others is default. Prioritization is not a way out of this cul-de-sac."

Casey said prioritization would mean that active duty troops would not be paid, as well as 4 million disabled veterans and the healthcare for a total of 5.9 million vets.

“It’s a really bad idea,” he said.

Bernstein also said there is a consensus on the issue in money circles.

“Economists tend to be a pretty wishy-washy group. Our favorite answer tends to be it depends. On this issue, you won’t find any equivocation on any side of the aisle,” he said. “It’s something that should be avoided assiduously. Even threatening is bad for the economy and wasteful of taxpayers money.”

Casey said that soldiers and veterans are not the only real victims of playing with the deadline.

“We have to be concerned about people buying homes, financing college education. It’s time for people to come together like adults are supposed to,” he said.

Lori Falce: 814-235-3910, @LoriFalce