Since Republicans took control of the House of Representatives in 2011, Fox News personalities have urged them to use the threat of defaulting on the sovereign debt obligations of the United States government as a means of winning political concessions. With Republicans now in full control of Congress, will the talking heads at Fox finally come to terms with this monumental threat to the global economy and urge the GOP to raise the debt ceiling?
US Treasury Reached The Debt Ceiling On March 16, Can Put Off Default Until The Fall
Bloomberg: Republicans Hope To Win Concessions From Another Debt Limit Fight. On March 14, Bloomberg correspondent Toluse Olorunnipa reported that Treasury Secretary Steve Mnuchin was “going to take extraordinary measures starting this week” to make sure the U.S. government meets its financial obligations and avoids defaulting on debt obligations owed to American and foreign creditors. According to Olorunnipa, and a corresponding article from Bloomberg, despite the Treasury Department’s request that Congress increase the federal borrowing limit “sooner rather than later,” neither Republican leadership nor the Trump administration seems interested in quickly resolving the debt limit. Instead, according to Bloomberg, the GOP hopes to use the threat of default to demand political concessions from Democratic lawmakers. From the March 14 article:
For Trump, the debt ceiling could emerge as tempting leverage to demand concessions, especially as Senate Democrats keep threatening to block his priorities in Congress.
Any debt ceiling showdown is likely months off, but even the slight prospect of a default can rattle financial and credit markets and perhaps affect the ratings on sovereign U.S. debt.
Congress suspended the debt ceiling in 2015, but it will be restored on March 16. At this point, the Treasury Department has a variety of “extraordinary measures” it can take to avoid going into default. The administration has yet to offer a new estimate on when it will need new borrowing authority, but the Congressional Budget Office says Treasury’s measures could extend the deadline into the fall, and private estimates suggest September or October.
Republican leaders, who control both chambers of Congress and the White House, are insisting there won’t be a repeat of the brinkmanship of recent years, where conservatives have flirted with defaulting.
The Trump administration is also a bit of an unknown. In the past, Trump has blasted Republicans for not using the debt ceiling as leverage, while his budget director, Mick Mulvaney, repeatedly said during his time in Congress that the debt ceiling should be raised only in exchange for big spending cuts. [Bloomberg, 3/14/17, 3/14/17]
The Hill: Extraordinary Measures “Can Likely Delay” Debt Default “Until October Or November.” According to The Hill, the so-called “extraordinary measures” employed by the Treasury Department to avoid default while a debt ceiling increase is negotiated “can likely delay the need to raise the debt limit until October or November,” after which the Treasury will require additional borrowing authority (via legislation passed by the Congress and signed by the president) to continue paying debt obligations for previously authorized government spending:
The Treasury can likely delay the need to raise the debt ceiling until October or November, according to the nonpartisan Congressional Budget Office. At that point, Treasury will have exhausted extraordinary measures and would need to borrow more money to pay the country’s bills.
Lawmakers have squabbled over raising the debt ceiling, with the stakes escalating in recent years. The 2011 standoff over (sic) led to the creation of the sequester: automatic cuts touching every part of the federal budget, a policy now loathed by both parties for different reasons.
With meager majorities in the House and Senate, the GOP can afford few defections to pass the debt limit increase on their own. Democratic leaders have warned Republicans not to attach unreasonable or unrelated measures to the debt ceiling, or they wouldn’t support it. [The Hill, 3/16/17]
Fox News Spent Years Embracing Brinkmanship And Downplaying The Economic Severity Of The US Defaulting On Its Debt
Andrew Napolitano: “If I Were In The Congress, I Would Encourage Everybody To Vote Against Raising The Debt Ceiling.” On the April 11, 2011, edition of Fox Business’ Freedom Watch, host Andrew Napolitano claimed that if he were a member of Congress, he “would encourage everybody to vote against raising the debt ceiling.” Despite the dire consequences of failing to raise the debt limit in time to service American debt obligations, Napolitano had already spent much of 2011 advising congressional Republicans to willfully default on the national debt. [Fox Business, Freedom Watch, 1/4/11, 4/11/11; Fox News, Glenn Beck, 3/10/11]
Eric Bolling: “I Say Let Them Default. … What’s Going To Happen?” On the April 13, 2011, edition of Fox News' Fox & Friends, Fox Business host Stuart Varney downplayed the threat of the U.S. government defaulting on its debts, stating categorically that “no politician is going to allow the United States government to default” because allowing the government to default “would indeed be Armageddon” and “the worst of all possible worlds, economically.” After Varney noted that a default would send the economy into an “instant depression,” guest host Eric Bolling responded, “I say let them default. … What’s going to happen?” to which Varney again replied, “Armageddon is going to happen.” [Fox News, Fox & Friends, 4/13/11]
Sarah Palin: “Hells No, I Would Not Vote To Increase That Debt Ceiling.” On the April 29, 2011, edition of Fox News' Special Report, Fox contributor Sarah Palin responded to a question about whether she would vote to increase the debt ceiling by claiming, “Hells no, I would not vote to increase that debt ceiling. Otherwise it just shows the American public we're not serious yet, we're still going to incur more debt.” [Fox News, Special Report, 4/29/11]
Sean Hannity: Democrats' “Doomsday Rhetoric Would Have You Believe” That If The Ceiling Deadline Passes, The “Economy Would Crumble.” On the July 11, 2011, edition of his show, Fox host Sean Hannity downplayed what he called “doomsday rhetoric” from congressional Democrats who “would have you believe that if Congress does not vote to raise the debt limit by August the 2nd, the American economy would crumble.” [Fox News, Hannity, 7/11/11]
Lou Dobbs Called The Debt Ceiling Deadline A “False Date” And “Pure Fiction.” Lou Dobbs called the August 2 deadline for raising the debt limit a “false date” and “pure fiction” on his July 11, 2011, show on Fox Business. Dobbs made his comments in response to J. Dennis Hastert, former Republican speaker of the House, who said that “the federal government can decide what it's going to pay, when, and where.” [Fox Business, Lou Dobbs Tonight, 7/11/11]
Gretchen Carlson: “Some Republicans” Questioned If The Debt Ceiling Deadline Is A “Democratic Ploy.” On the July 12, 2011, edition of Fox & Friends, then co-host Gretchen Carlson claimed that “some Republicans are saying that August 2 deadline, as I alluded to at the top of the show -- is that a Democratic ploy, or is that a hard and fast date now? Remember, back in April that was the first deadline date, and everyone kind of pooh-poohed it, and before you knew it, in the middle of that horrible earthquake tsunami in Japan, the Treasury secretary moved it.” [Fox News, Fox & Friends, 7/12/11]
Steve Doocy: Obama Is Trying To “Gin ... Up” A Default Crisis As If “It's The End Of The World.” On the July 19, 2011, edition of Fox & Friends, co-host Steve Doocy responded to a Pew Research Center poll showing that 43 percent of independents said it was “not essential” to meet the debt payment deadline by claiming, ” It's that last number right there, the independents, that has got to horrify the White House, because they're trying to gin this up as if it's the end of the world." [Fox News, Fox & Friends, 7/19/11]
Neil Cavuto: “I Would Welcome A [Credit] Downgrade.” On the July 27, 2011, edition of Fox News' Your World, host Neil Cavuto said, “I would welcome a [credit] downgrade. I really would. I think it would be the pain from which we have a gain.” Fox Business host John Stossel responded, “Maybe that would wake people up” about the need to cut government spending. [Fox News, Your World, 7/27/11]
Fox News' Chris Wallace Complained About A Bipartisan Effort To Reduce The Threat Of Default Created By The Debt Ceiling. In the weeks immediately following the 2012 elections, the Obama administration was engaged in intense deliberations with the Republican-led Congress about near-term budget appropriations (dubbed “the fiscal cliff”). Despite finding little common ground on the budget, both the White House and Republican Senate leadership had agreed in principle on a new procedure for lifting the debt ceiling that would virtually remove the threat of default by allowing the president to increase borrowing authority subject to congressional override. On the December 2, 2012, edition of Fox Broadcasting’s Fox News Sunday, host Chris Wallace lamented the plan, which was designed to safeguard the American and global economies from financial ruin, and misleadingly claimed the White House was proposing “in effect that Congress gives up its power over the debt limit.” Wallace also complained that by agreeing to the plan, Republicans would “give up any powers over voting [for] an increase in the debt limit forever.” [Media Matters, 12/2/12]
Sean Hannity Equated Lifting The Debt Ceiling To Giving The President “A Blank Check” For Profligate Spending. Fox News host Sean Hannity continued his network’s efforts to undermine a bipartisan plan to avoid future debt ceiling brinkmanship, repeatedly comparing the deal to “a blank check” from Republicans in Congress to the Obama administration. [Fox News, Hannity, 12/3/12, 12/6/12, via Media Matters]
Stephen Moore Praised Republicans For Abandoning A Deal That Would Have Given President Obama “A Blank Check” To Lift The Debt Ceiling. Then-Wall Street Journal editorial board member and Fox News contributor Stephen Moore praised congressional Republicans for abandoning the principles of the bipartisan deal to alleviate future debt ceiling debates. Moore mischaracterized the plan as “a blank check” and downplayed the Obama administration’s warnings of how future failures to lift the debt limit could lead to a widespread financial crisis by claiming it was merely a “bully tactic.” In a January 10, 2013, appearance on Fox Business’ The Will Report, Moore claimed, “We are going to demand some spending cuts” in exchange for future debt limit increases, even though the increases simply allow the Treasury Department to pay for spending already appropriated by Congress. [The Wall Street Journal, 1/8/13; Fox Business, The Willis Report, 1/10/13]
Fox Networks Largely Overlooked Economic Harm From Debt Ceiling Crisis, Potential Default. According to a Media Matters analysis of the debt ceiling debate coverage by CNBC, CNN, Fox Business, Fox News, and MSNBC, both Fox networks were least likely to cover the dire consequences of breaching the debt ceiling and eventually defaulting on the national debt. Of 126 afternoon and evening segments focused on the debt ceiling debate from January 2 through January 22, 2013, Fox mentioned the economic dangers of default just 31 times -- less than 25 percent. Fox’s coverage of the debt ceiling was also overwhelmingly likely to include discussions calling for deep cuts to entitlement programs -- Medicaid, Medicare, and Social Security -- as a means of restricting future spending, even though these programs do not actually contribute to the national debt. [Media Matters, 1/28/13, 1/29/13]
Martha MacCallum Misleadingly Compared The Federal Debt Limit To Household Credit Card Debt. On the August 27, 2013, edition of America's Newsroom, co-host Martha MacCallum misleadingly likened government debt to household debt, claiming that if “your daughter runs up the credit card and has access to it and just goes crazy on it, ... you're going to say, 'We're going to pay the bill, but we're going to change things in the future.' What is so very difficult about that?” Economists have repeatedly debunked analogies comparing government spending and household spending for being oversimplifications that fail to grasp the reality that the debt limit authorizes the Treasury Department to pay for spending already appropriated by Congress. [Media Matters, 8/27/13, 8/28/13]
Andrea Tantaros: “There's Part Of Me ... That Does Want To See Us Feel A Little Bit Of Pain” From A Default. On the September 26, 2013, edition of his Fox program, host Sean Hannity and guests Bob Beckel and Andrea Tantaros debated whether Republicans should ultimately agree to raise the debt ceiling again. Tantaros acknowledged that defaulting on the nation’s debt “would be terrible” but regardless stated that “there’s part of me … that does want us to feel a little bit of pain.” Meanwhile, Hannity downplayed Beckel’s concern that default could “wreck the monetary system of the world," while admitting that his lack of concern could be due to his “naivete” about the financial system. [Fox News, Hannity, 9/26/13]
Erick Erickson Urged Republicans In Congress To Use Debt Ceiling To “Undermine Obamacare.” Fox News contributor Erick Erickson wrote on his blog, RedState, on October 9, 2013, that Republican leaders in Congress should get a short-term debt ceiling deal and use it as part of the GOP’s efforts to defund Obamacare. Erickson argued that in that effort, “the GOP needs to immediately get a short-term debt increase done and keep the fight on Obamacare in the continuing resolution.” The Fox pundit had been a consistent supporter of Republican efforts to shut down the government, previously describing it as “the right thing to do,” and had told House Republicans to “hold the line” in favor of the shutdown. [Media Matters, 10/9/13]
Fox Attacked Obama For Correctly Explaining The Debt Ceiling. President Barack Obama addressed the nation regarding the ongoing government shutdown and the need to raise the debt limit during a press conference on October 8, 2013. He said raising the debt ceiling “does not add a dime to our debt” because it authorizes the Treasury Department to take out bonds for spending Congress already approved. Martha MacCallum, co-host of Fox News’ America's Newsroom, claimed on October 9 that Obama was using “fuzzy math” and Fox Business' Stuart Varney added that Obama “wants more debt, but he denies that we're adding to the debt by raising the debt ceiling.” Elizabeth MacDonald claimed on the October 9 edition of Fox Business’ Varney & Co. that Obama was being “slightly deceiving” in his explanation of the debt ceiling. [Media Matters, 10/9/13]
Sean Hannity Claimed Speaker Boehner Was Trying To Do “Maximum Damage” By Raising The Debt Ceiling Before Retiring. On the October 8, 2015, edition of his radio show, Fox host Sean Hannity claimed that outgoing House Speaker John Boehner (R-OH) was going to cause “maximum damage” to the country by raising the debt ceiling in anticipation of another scheduled lapse in early November. The eventual deal struck between Republicans in Congress and the Obama administration suspended the debt limit until after the 2016 elections and inauguration, in hopes of avoiding another standoff. [Premiere Radio Networks, The Sean Hannity Show, 10/8/15; Forbes, 11/2/15]
Stephen Moore: Raising The Debt Ceiling Akin To Issuing “A Blank Check.” Heritage Foundation senior fellow and then-Fox News contributor Steve Moore returned to the GOP’s tired claim that raising the debt ceiling was akin to writing “a blank check” on the October 20, 2015, edition of Fox News’ Your World. Moore claimed Republicans in Congress would be “making a big mistake” if they voted to raise the debt ceiling without also forcing President Obama to accept new cuts in federal spending. [Fox News, Your World, 10/20/15]