Democratic senators said they left a Wednesday meeting with Treasury Secretary Jacob J. Lew more concerned about the likelihood of government default as a result of Congress failing to lift the debt ceiling than they were even during the brutal fight on the issue back in 2011.
Members of the Senate Finance Committee huddled with Lew to discuss the imminent deadline to extend the government's borrowing capacity. Treasury has projected that the U.S. will hit the debt limit by mid-October.
"I'm more worried about default than I've ever been," Sen. Charles E. Schumer, D-N.Y., told reporters at a news conference to discuss the economic costs of brinksmanship on the debt limit.
"I came out of that meeting, as Chuck just said, a lot more concerned about the debt limit than I was going into that meeting. I wish I could have been encouraged coming out of that, but I was discouraged coming about of that," Sen. Bob Casey, D-Pa., said. "You have people in the Republican Party in both Houses who — very rational conservatives — [are] talking about this in ways that I've never heard before. And if all you care about, you're a Republican official and all you care about is fiscal responsibility, making the right choices from a fiscal point of view ... this is among the most fiscally reckless and dangerous things you can do. But it seems even on something as fundamental as paying our debts and not going into default ... [the GOP] cannot take on the extremes [of their party]."
Casey and Schumer joined the top Democrat on the Joint Economic Committee, Sen. Amy Klobuchar of Minnesota, to tout the panel's report on the economic costs of delaying an extension of the debt limit. In the Budget Control Act debate of 2011, the impasse on an agreement to raise the debt ceiling cost taxpayers $1.3 billion in the form of the Treasury having to pay higher yields than typically would have been necessary, the JEC reported.
A GOP source indicated that Republicans and Lew talked past each other for much of the morning meeting. That source characterized Lew as repeatedly emphasizing the threat of default. At one point, Sen. Patrick J. Toomey, R-Pa., told Lew that there was enough money coming into the Treasury to pay interest on the debt, which technically would avoid default, but would come at the cost of paying other bills (like military personnel's salary, for example.). The House Republicans' Full Faith And Credit Act would ensure that the Treasury made that prioritization.
Sen. Rob Portman, R-Ohio, highlighted the same point in the meeting that Senate GOP leadership has been making publicly: that debt ceiling votes historically have come along with larger budget deals.
In that press conference later in the day, Schumer was passionate about this particular issue, raising his voice when explaining that the demands and the GOP's willingness to teeter on the brink of default was stronger now than it was at the time of those agreements in the 1980s and 1990s.