INDIANAPOLIS | Count U.S. Rep. Todd Rokita among Republicans who -- contrary to nearly every economist -- believes it would be a good thing in the long run if the United States defaults on its national debt Thursday.
The Munster native denied during a radio interview Monday the nation even faces the risk of default. Rokita, R-Indianapolis, said the U.S. Treasury simply can prioritize payments on the debt over all other spending to ensure bondholders are paid what they're owed.
"We have the cash flow to meet our debt. What we don't necessarily have is the cash flow to meet our debt and then all of the things that we want," Rokita said on WIBC-FM, a station out of Indianapolis. "There would be a tremendous crunch and a prioritization that would have to go forward in order to decide what's really important."
The second-term congressman said money remaining after paying the daily debt should go to the military first. He did not detail which federal agencies should get funded after that or what should happen if enough money did not remain for Social Security checks or Medicare expenses.
Treasury Secretary Jacob Lew advised Congress last week that it's not technically possible for federal payment systems to prioritize as Rokita suggests. Lew also warned that failing to increase the debt limit limit by Thursday would cause "irrevocable" damage to the economy and financial markets.
"I think prioritization is just a default by another name," Lew said.
Rokita acknowledged his strategy likely would put millions of government employees out of work but seemed gleeful at the prospect of the permanently smaller government he envisions would result.
"It certainly would hurt the economy in the immediate term because you couldn't have this size of government with all these people. So they would have to be let go and more than just furloughed," Rokita said.
"In the medium- and long-term, you would see with this contraction of government an explosion of the private sector where people can keep their money again and use it in the ways they want to -- instead of it being taxed away."
Concerning the federal government shutdown, Rokita barely mentioned the House Republican effort to delay or defund the Affordable Care Act, also known as Obamacare. The move prompted the Oct. 1 closure of most federal agencies.
Instead, he said House Republicans now are fighting to preserve the sequester -- the $1.2 trillion in across-the-board budget reductions that began March 1.
Rokita is sure Democrats are plotting to undo those cuts but said he has "no hard evidence other than my gut."