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Government Warnings Falling on Deaf Ears?

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    Rep. Jeff Flake, (R-Ariz.), discusses whether the government will default on its loans.

  • Duration 5:58
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Are you saying Geithner is line because why -- basically saying we're not gonna meet some of our obligations.

He's wrong all you have to do is look at the books we have sufficient revenue coming -- We can pay off all of those obligations first and we must we always have.

We always -- everyone needs to get their feathers down and not get ruffled.

You only a leader in the house he's really.

To extend.

That debt ceiling you are the renegade hear those guys are saying we have to raise the debt limit you know that.

Now you know.

May be right that the GOP leadership ultimately will cave in of President Obama but presidential candidate Bachmann also has a point -- a good -- not only are the American people on her side by a wide margin but so is.

Even Goldman Sachs today issuing a note saying quote.

We continue to believe that a default is extremely unlikely as the treasury would.

Likely prioritize interest payments sources -- Medicare payments.

-- -- defense payments even other types of spending and should have enough revenues to cover the essential so basically they're saying.

A shut down is a possibility but the -- is unlikely let's welcome back budget bark.

Jeff flake Republican from Arizona I don't know if you -- -- battle between a roughly apartment this.

But frankly I think I think -- is is more correct.

In saying that while on the one hand the GOP may strike a bad deal the US government won't to fall even if the debt ceiling is not lifted.

Well certainly not on August 2 you know at some point you're gonna run up against -- the fact that we're.

Borrowing forty cents on the dollar so -- after a while you're gonna have to do something else that the notion that we're gonna default.

On August 2 I think -- bit farfetched.

Now what about the possibility that some GOP leaders in the fingers are pointing it at congressman Boehner the speaker of the house.

Might be willing to let.

To let the ceiling kind of dribble off that's it for fighting using expression drivel upn and cover the next year or so of expenses is is they're gonna be a temporary.

Deal like that kind of a patch for the debt CO.

You know we we had a median house Republicans today and I certainly didn't get that sense from him.

So I think we all recognize here that this is the president's move.

We've already passed -- budget we have we've laid our cards on the table the president simply hasn't yet.

Now -- that a lot of talk about the promises as we're looking at the debt ceiling which I think only in one brief instance where we have that surplus did it go down over the past.

Forty or fifty years or so it's of course fourteen point four trillion.

Is it conceivable that that if in fact you make a deal with the president some kind of deal that includes.

Raising revenues somehow that in fact.

Those tax increases.

You may he may get his tax increases but in the end it.

You may not get the cuts in the budget that that he's -- Well that's certainly a possibility that's the way it usually goes around here -- we exactly the point my point is we've seen that happen -- corporate.

The first President Bush made a bargain like that.

With the Democrats in congress and he lost he he went against his pledge read my lips don't raise taxes you raise taxes and then this -- spending cuts never came into effect.

But that's definitely what we have to worry about here that's like house Republican -- conservatives have -- we've got to have to cut capital balance strategy.

And the second one the caps are you know.

Insurance against the fact that will likely miss our spending targets we always do here.

So we need some something that comes in like Gramm Rudman Hollings or or pay go back when it worked.

Two to give us a hair -- or whether we like it or not and then.

The long term you need some kind of mechanism.

Like a balanced budget amendment to enforce these spending caps because typically they'll go for a couple of years in congress simply waves them.

Yeah and frankly pay go.

I know you referenced the time when it did work right I just read several times when it didn't work.

Right exactly and that's when it came to it just way that it will.

That's -- problem congress can simply waive any rules.

That aren't you know in the constitution so.

That's fire -- it's important to do a balanced budget amendment for the long term.

By the way we started the program tonight talking about -- president's statement that in fact some Social Security checks may not go out.

I don't know about you but we had an expert Social Security -- saying that in fact those payments.

Have to go out that they are considered.

The same is any kind of debt payment to any -- ready so if were paying off the Chinese and the Germans.

-- -- US debt we also have to pay off Social Security recipient.

You can bet that that would certainly be a priority.

And hopefully we've.

We have with the -- that everybody has politically to satisfy their constituency then we'll move on some of the other items.

But beyond priority is it not law congressman that you have to consider.

Debt payments before Social Security bonds in -- same court categories any other bonds.

I'm not sure about that I haven't heard that before and I mean you can change.

You can you can change those payments that -- what we're trying to do with long term.

Social Security reform so I'm not sure about that -- seen.

OK bottom line and I know you got to go because there are a lot of votes this evening prime is is it conceivable that.

If if Republicans do make some got to deal with with the president at that leads eventually to higher taxes that.

The same thing that happened to the first President Bush we're talking about earlier what happened event.

That is they would lose any election.

That's -- -- entirely conceivable yes.

Representative Jeff.

Please go ahead final final -- has just gonna say.

We've got to cut spending that's going got to do and whatever leverage we can use who we audience that merely cut spending we know you guys are scrambling there we appreciate you -- some time for us.

Jeff -- thank you very much coming up on deck we --

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