Republican Congressman Steve King is striking back at Democratic Senator Tom Harkin for suggesting King is wrong to suggest the October 17 “debt limit” date is a fiction.
“I hope Tom Harkin understands when we reach the debt limit that doesn’t mean default,” King says. “Default on our debt would be if we failed to service our debt which requires that we pay the interest and then, at a minimum, roll over the principle of our debt which means we could borrow money from the Saudis to pay off Chinese bonds or vice versa or we could borrow money from the American people to pay off bonds from Saudi Arabia or China.”
Harkin said last Thursday it is “bizarre” for King to suggest the president has the authority to reorder federal spending plans, pay the interest on the national debt, and put off repayment of the bonds. That would be like telling creditors to “take a hike,” according to Harkin. King accuses Harkin of “injecting a fear factor” into the debate and King argues Americans are paying enough taxes to the federal government to cover the interest on the debt.
“We’re spending about eight percent of our cash flow, of our revenue stream, on interest. That’s roughly $18 billion a month. We’ve got some $240 billion or so a month coming in,” King says. “We’re a long ways from defaulting on our debt.”
King, though, says congress cannot go “indefinitely” without voting to raise the so-called “debt ceiling” unless there are significant cuts to the federal budget.
“But reaching the date of October 17 is not a drop dead date. It is not a default date,” King says. “It’s just a date that the government, the Obama Administration has said they think they run out of borrowing capacity.”
King cites last week’s analysis from Moody’s — a credit-rating agency — that concludes the U.S. government “would continue to pay interest and principal on its debt” even if congress fails to raise the debt limit. King says the debt limit is an “effective check and balance” congress can use to influence the president to make concessions.
King made his comments during an interview with Radio Iowa.