Steamrolling toward another fight on the nation’s debt limit, U.S. Sen. Pat Toomey seems poised to again push for prioritizing debt payments along the lines of his 2001 Full Faith & Credit Act, the first bill he introduced in Congress. The idea is to pay off interest on debt first (thereby avoiding default) and making payments on Social Security and the military, while holding off other debt issuance to force cuts in spending.
In two years, all that’s changed is the “paying our military” part of the play. Toomey wants to avoid the optics of summer 2011, when Democrats said (correctly, if a little too pat) that being unable to issue new debt meant that the government couldn’t pay its bills to popular people, like veterans. But wasn’t the nadir of the debt fight worse than all that? After a point, when you’re saying the rest of the government can do without payment for a while, aren’t you shutting down FDA inspections? While doing this, aren’t you panicking the markets and lowering consumer confidence?