Dueling Default Deadlines: Rep. Huelskamp Says Oct. 17th Is Not Doomsday
(CNSNews.com) – Rep. Tim Huelskamp (R-Kan.) said on CBS’ “Face the Nation” Sunday that “there are no payments [on the national debt] due on October 17th,” adding that he agrees with Vice President Joe Biden, who declared in an August 2011 speech in Chengdu, China that “the United States has never defaulted, and never will.”
The Kansas Republican made the remark after host Bob Schieffer asked him if he was willing to let the federal government default and “plunge off into the unknown…in order to postpone Obamacare, which you haven’t been able to do…Are you willing to let that happen to prove this point?”
“Bob, I know you’re probably surprised to hear me say this, but I agree with Joe Biden,” Huelskamp replied. “In August of 2011, the last time we had this type of crisis, Joe Biden admitted in China to our folks over there that will be no default, it’s not going to happen. There are no payments due on October 17th to pay our creditors. There are no payments due until November 15th; that’s why Moody’s has indicated it’s not going to have a major impact…”
“But congressman, congressman, I don’t want to interrupt you here, but that’s not what the Secretary of the Treasury says, that is not what he reported. That just, is not…you tell me,” Schieffer interjected.
“Well, he said a lot of things a week ago, I think," Huelskamp said. "Clearly the White House is trying to scare the markets. I think that’s unfortunate. At the end of the day, the reality is October 17th is a date that will not have a major impact unless the White House is able to create concern about that.”
Huelskamp said earlier this month that he will vote against raising the debt ceiling unless Congress agrees to a long-term plan to balance the federal budget and rein-in Obamacare. He also accused the White House of "fear mongering" on the debt ceiling issue.
His comments highlighted the dueling default deadlines on the $16.699 trillion national debt that are being tossed around in Washington in an attempt to break the current congressional logjam. That may also be why the stock market is not reacting to the doomsday scenario.
In an October 1 letter to House Speaker John Boehner, Treasury Secretary Jacob Lew wrote that “Treasury continues to believe that extraordinary measures will be exhausted no later than October 17, 2013.”
However, according to the Congressional Budget Office (CBO), there are no Treasury bond interest payments due on October 17. Two weeks later, on October 31, about $6 billion in interest on Treasury securities comes due, followed by the large quarterly payment of $30 billion due on November 15.
In an October 9 letter to his House colleagues, Huelskamp wrote that “the Administration and media are selling October 17th as doomsday for the economy…The math confirms that we will almost certainly make it into November before we need to prioritize interest payments.”
“According to CBO, Treasury must make only one significant interest payment between October 17th and November 14th. The Treasury will owe roughly $6 billion in interest on October 31st, the same amount as just three days of deficit spending. It is clear that the Secretary of the Treasury will be able to make that payment with its daily receipts.
"On November 15th, Treasury must pay approximately $30 billion in interest, truly a significant amount. So, November 15th is the date we should actually be concerned about when it comes to the need to prioritize - not October 17th.
“The math confirms that we will almost certainly make it into November before we need to prioritize interest payments,” Huelskamp wrote.
Mark Zandi of Moody’s Analytics believes that November 1st, the day after the $6 billion in interest comes due, is “the point of no return.”