Last week, Governor Palin appeared on Hannity in part to discuss the current debt ceiling debate. Governor Palin referenced President Obama’s comments earlier in the week where he said he was not sure that the federal government could pay Social Security benefits if the debt ceiling was not raised. She said:
We have the $200 billion coming into the federal government every month. It takes $35 billion — I’m sorry, billion dollars — we have $35 billion that we must use to service the debt, $50 billion that we must use to write those Social Security checks, $2.9 billion to pay for our military personnel, and then other essentials.
You prioritize. Our president essentially suggested the other day that he’s not able to prioritize. As the chief executive of our nation, he cannot prioritize, and that’s why he suggested that Social Security checks may not be written come August 2nd if that debt ceiling isn’t increased.
No. You pay for the essentials first and then the non-essentials have to get cut. They have to wait.
Today, Obama administration budget director, Jacob Lew, appearing on CNN’s State of the Union, affirmed Governor Palin’s assertion that the Obama administration is incapable of prioritizing spending. To CNN’s Candy Crowley’s credit, she pushed Lew on this issue of prioritization of funds in the situation that the debt ceiling is not raised, and Lew did not provide an answer:
CNN’s Candy Crowley, HOST: “More immediately, you’d have to make some spending priorities — payment priority decisions: Social Security benefits, and federal worker pay, and defense contractors. What are your priorities should the debt ceiling not be raised on the 2nd, when you have the bills that immediately come due? Social Security checks, federal worker pay, defense contractors?”
Jacob Lew, WH Budget Director: “Our plan is for Congress to do its work and the President to sign into law legislation that will make it possible for the United States as it always has, to keep its obligations. We’ll be ready to deal with whatever happens. There is no plan other than meeting our obligations.”
CROWLEY: “Surely you must have discussed priorities, though, we have to pay this?”
LEW: “The truth is this is a different situation the United States has ever faced. We’ve never gone into a situation where we didn’t have enough money to pay our bills. We borrow 40 cents on a dollar right now. And if the time comes when we lose the ability to pay our bills, there will be a cash flow issue that is very real, and that’s why it’s critical that Congress take action before August 2nd.”
CROWLEY: “Would you allow it to happen that those the Social Security checks would not go out? Would you allow that to happen?”
LEW: “As the President has indicated, it’s not a question of what we allow and what we don’t allow –”
CROWLEY: “But you get to decide priorities. There will be some money –”
LEW: “There will not be enough money to pay all the bills.”
CROWLEY: “Of course not, that’s why I’m talking about priorities.”
LEW: “I think that once someone gets into the business of trying to ask about setting priorities it misses the question. Which is that it’s unacceptable for the United States to be in a place whether it’s Social Security recipients, or a soldier or somebody who is just owed money by the government can’t be paid because we have not done our job.”
The Obama administration has no reason to avoid the question, nor be unwilling to prioritize funding. The CATO Institute had a great piece up last week discussing the debt ceiling in which they re-emphasize Governor Palin’s point– the debt ceiling does not need to be raised when spending is prioritized and proper cuts are made. In fact, according to the CATO Institute, if our federal government was willing to cut spending back to 2003 levels, the roughly $200 billion in tax revenues would be more than sufficient to cover Social Security, Medicare, military pay, and servicing the interest on the debt. Obviously, there is no need for Social Security and Medicare recipients, folks who have had money deducted from their checks for decades to go towards these programs, to not receive their payments, nor is there any need for soldiers, who defend our freedoms, to not receive their pay, regardless of what happens to the debt ceiling.
When Governor Palin speaks of prioritizing spending, she’s not playing the role of armchair executive. Governor Palin has prioritized spending and made cuts, even in times of surplus. Her prudent budgeting has been well documented, as she cut the Alaska budget 9.5% during her time as Governor. She vetoed hundreds of millions of dollars in unneeded spending, rejected stimulus funding that would not be effective in Alaska’s climate, and removed duplicated federal/state funding from her budgets. At the same time, Governor Palin’s tenure included implementing a Senior Benefits program for low income elders. She also increased funding for students with disabilities in rural schools and increased funding for special needs education. Overall, she increased special needs funding by 175%. The very things that Governor Palin called for are the very things that she has done during her political career. She prioritized and budgeted accordingly—cutting unneeded spending and providing funding for people who needed it most. How much more are such prioritizations and cuts needed in harder economic times?