Rep. Brat: ‘Middle Class Is Very Smart’ And Won’t Abide A Bad Debt Ceiling Bill

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Thomas Phippen Associate Editor
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Congress should approve funding for Hurricane Harvey recovery and raise the debt ceiling, but needs to address government spending habits to fix America’s debt crisis, Virginia Republican Rep. Dave Brat said Tuesday.

“You can do both at the same time. We can take care of Texas — and our hearts go out to them — and you can raise the debt ceiling in the short run if you show the American people that you’re serious about the future of fiscal sanity in this country, which we haven’t been for decades,” Brat said on a conference call with the conservative FreedomWorks.

Congress is expected consider an initial round of funding for Harvey recovery this week, and may seek to tie additional funding for disaster relief to legislation raising the debt limit later in September. The government will reach the debt ceiling by the end of the fiscal year at the end of September.

The White House is seeking a clean debt ceiling bill, meaning an increase in the amount the government can borrow to pay it’s debts without spending or structural cuts.

“We’re going to get the debt ceiling passed. I think that everybody understands this is not a Republican issue, this is not a Democrat issue,” Treasury Secretary Steven Mnuchin said in August. “We need to be able to pay our debts.”

“There is a deadline in the short run, but there’s also a deadline to turn the ship around so the next generation doesn’t get tanked with this looming debt bill,” Brat said.

The problem with raising the debt ceiling is that it merely continues the government’s habit of irresponsible spending, according to Brat.

Each time the U.S. approaches the limit of money it can borrow, it reaches a crisis point and “financial markets get spooked, and therefore you have to do something financially derelict” like amount of money it can borrow, Brat said. “And then you spend forever.”

If the Republicans, who now control the Executive Branch and both houses of Congress, cannot change the habit of increased borrowing without reducing spending, the electorate will turn on them.

“The middle class is very smart. They get things at a gut level, and at gut level, the middle class knows that DC is out of control,” Brat said. “The bubble is under intense scrutiny.”

Stephen Moore, senior economic contributor for FreedomWorks, went a step further on the conference call with reporters, saying that the Republican Party will lose its majority if it passes a debt ceiling bill with caveats that encourage greater spending.

“Now we’re hearing from the Democrats that as a condition for voting for a clean debt ceiling bill, they would want something like the Obamacare fix that they have long wanted, the bailout to the insurance pools and the insurance companies,” Moore said.

“That would be a complete, unmitigated political catastrophe for the Republicans, to raise the debt ceiling and bail out Obamacare. The Republicans in my opinion, would lose the House, would lose the senate. Republicans should not go that route,” Moore said.

FreedomWorks sent a memo to the White House listing four options for better fiscal policies to accompany the debt ceiling in late August. Brat is on board with most of those ideas, like a one-penny reduction, where spending is cut by one percent across all government programs, with the exclusion of Social Security.

But the prospect of financial stability is moot if Congress can’t reform revenue in a new tax bill, and some of the proposals that would increase government revenue — like the border adjustment tax, which Brat and others in the House Freedom Caucus supported — have already been dismissed by leadership.

“If we don’t pass healthcare, we’re going to come up a trillion light on taxes” when it comes time to pass tax reform, Brat said. “The border adjustable piece, if we lose that, we’re a trillion light there.”

In the end, Brat said it’s the responsibility of the leadership to sell fiscally responsible measures to the American people. Republicans should have plenty of leverage after winning the presidency and majorities in the House and Senate, but are being held up by the Democrats.

“The president, and [Speaker Paul Ryan], and [Senate Majority Leader] Mitch McConnell all need to speak in one voice,” Brat said. “Our leadership across the board need to go to the American people, and say here’s what’s going on.”

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