Mulvaney: U.S. Won't Default On Debt
SCOTT SIMON, host: Republican Congressman Mick Mulvaney is on the line. He's a House freshman who represents South Carolina 5th District and serves on the House Budget Committee. Representative Mulvaney, thanks for being with us.
Representative MICK MULVANEY: Thank you for having me.
SIMON: And you heard that phrase: now we're out of time. Scott Horsley, our reporter, quoting the president. You said on the House floor this week you don't believe all these warnings about a credit default. Why not?
MULVANEY: Well, if you take a look at the law, you look at a couple of things. Number one, the Social Security checks can go out on August 3rd without increasing the debt ceiling - the president has the legal authority to do that and the money with which to do that, the money's in the trust fund. And the law specifically provides for exactly this circumstance. So, the checks can absolutely go out on August 3rd if the president wants them too. Similarly, there's a law that empowers Geithner, excuse me, Secretary Geithner to pay the interest on the debt and prevent a default on August 3rd and well beyond that. And, again, just as importantly, there's plenty of money coming in with which to pay the debt as it comes due and pay the interest on that debt. So, there's no need for a default, there's no need for Social Security checks not to go out. So, to a certain extent I do think, yeah, there's a good bit of politics driving the brinkmanship here.
SIMON: You think the deadline is phony?
MULVANEY: I think the deadline is very soft. I've been very clear with people that if we do not lift the debt limit there will be pain; there is no question about it. Government contracts will not be paid, government workers will not be paid. But it is not accurate to say that we will automatically default on the debt nor is it accurate to say we cannot make the Social Security payments on August 3rd.
SIMON: But are you just talking about timing or do you think the consequences are not that serious?
MULVANEY: Well, I think a consequence of not paying government workers is pretty serious. The consequence of not living up to government contracts is serious. But a lot what's driving this fear amongst the seniors for sure, is that they're not going to get their checks; and I'm saying that's not accurate. And then certainly there's this worry on Wall Street there will be a default on our bonded indebtedness. And I'm saying that that doesn't need to happen either. I'm not saying that things are going to - you can go from spending 100 cents on the dollar to 53 cents on the dollar, which is what we'd be doing, without pain. There absolutely will be pain and difficulty. But there will not be a default, nor will there be a failure to send out Social Security checks.
SIMON: Wall Street seems to be worried because they think the Congress can't and the president can't reach an agreement. Does Speaker Boehner feel free to strike a deal or do you think he's beholden to members of your caucus?
MULVANEY: I think we're not trying to find a deal, we're trying to find a solution. And I enjoyed your piece. I was listening on the phone when it was running. It said can the House Republicans get to yes? Can they say yes to anything? That was the president's question. And I think what's getting lost in this is that we've already said yes to something. You know, one of the most conservative bodies in Washington right now, in fact the most conservative body, has already said yes to a plan that would raise the debt ceiling by $2.4 trillion. It's called cut, cap and balance - probably the only - it is the only plan that's passed, the only plan that's been offered on a bipartisan basis that has passed. We have said yes to the debt ceiling increase already. We're waiting for somebody else to say yes to that plan.
SIMON: Let me ask you in about the 30 seconds we have left, congressman, are you willing to see the United States default on its obligations, be it August 2nd or some date shortly thereafter?
MULVANEY: We are going to default sooner or later if we don't change things. I think it's disingenuous for us to say if we simply raise the debt ceiling, all of our problems go away. If we don't deal with the problem now we're simply putting off the inevitable for another day.
SIMON: Congressman Mick Mulvaney of South Carolina, who's a member of the House Budget Committee. Thank you very much for being with us, congressman.
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