Republican members of the House Financial Services Committee determined that the Department of the Treasury and the Obama administration misled the American people on its plans to deal with the risks to the debt ceiling.
According to The Hill newspaper, the committee learned, in documents subpoenaed from the administration, that the Treasury Department had consulted with Federal Reserve officials about prioritizing payments and deliberately worked to keep lawmakers in the dark despite saying publicly such a plan would be unworkable.
One communication from the Federal Reserve was especially damning, saying, “Treasury wants to maximize pressure on Congress by limiting communications about contingency planning.”
The congressional investigation found the Fed and Treasury ran scenarios to come up with a payment plan if the debt ceiling prevented the nation from borrowing more funds.
“These internal documents show the Obama Administration took the nation’s creditworthiness and economy hostage in a cynical attempt to create a crisis so the President could get what he wanted during negotiations over the debt ceiling,” House Financial Services Chairman Jeb Hensarling (R-TX) said.
“The Administration owes it to the American people to be honest and transparent about its debt ceiling contingency plans,” the Congressman added.
The Dept. of Treasury dismissed the charges of wrongdoing, saying they have been forced to consider “how it would operate in the unthinkable event that Congress fails to raise the debt limit,”
The Treasury spokesman went on to insist that delaying payments would “still be default” regardless.
The investigation also discovered that some members of the Fed were concerned Treasury was pursuing a single-minded solution instead of considering a wider range of options. In the communications, one Fed employee said Treasury’s approach was “crazy, counter-productive, and add[ing] risk to an already risky situation.”
Even as the Obama administration seems to want to make matters out to be dire and to cause a panic as early as possible, Republican policies featured prioritization plans, insisting the government brings in plenty enough revenue to keep up with critical programs like interest on government debt and payments to Social Security.
Thus far, contingency plans have not been put to the test, as Congress and the president have time and again reached a deal to raise the debt ceiling.
But the constant raises in the borrowing limits have come at a cost, especially for the Republican Party. In October of 2015, for instance, when the Republican House leadership joined with Obama to raise the debt ceiling once again, many accused then Speaker John Boehner of breaking yet another promise. The constant pressures on Boehner led him to resign shortly afterward.
During the same deal, Kentucky Sen. Rand Paul famously launched a filibuster of the policy giving him a major issue going into the primary season then just starting.
Follow Warner Todd Huston on Twitter @warnerthuston, or email the author at igcolonel@hotmail.com.