January 17, 2013 5:27 pm

DeMint urges face-off over debt ceiling

With weeks to go before the US reaches its statutory debt limit, some conservatives inside and outside of Congress have been getting cold feet about refusing permission to authorise new borrowings to pay the country’s bills.

But Jim DeMint, who quit the Senate late last year to become the next president of the Heritage Foundation, a conservative Washington think-tank, is urging Republicans in Congress to hold their nerve in the upcoming confrontation with the White House.

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Mr DeMint, a Tea Party favourite in the Senate, said Republicans should use the debt ceiling to force the budget on to a sustainable path. He dismissed claims that a refusal to back new borrowings threatened sovereign default.

“The government itself is not going to shut down. In fact, I don’t think people are even going to notice it,” Mr DeMint told the Financial Times.

The US Treasury has warned the country would run out of money to pay its creditors some time between mid-February and early March unless Congress acted to increase the $16.4tn borrowing authority.

The US came within hours of such an outcome in August 2011 before agreement was reached, but it still suffered the first downgrade of its triple A credit rating by Standard & Poor’s.

Such a prospect is looming again, and a deal shows little sign of appearing, with relations between Barack Obama and John Boehner, the Republican house speaker, souring further in recent budget negotiations.

Prominent conservatives, including former house speaker, Newt Gingrich, have urged Republicans in Congress to avoid a fight over the debt ceiling, because the pressure to lift it from financial markets will eventually be irresistible.

Instead, they say that Republicans should use other negotiations over the budget in March to extract concessions on spending from Mr Obama.

Mr DeMint, however, says he has seen such arguments used too often before by the Republican leadership in 2010 and 2011 to persuade conservatives to back down in budget battles to find them credible now.

Along with many others on the right, he rejects claims that refusing to authorise new borrowings means default. He says tax receipts provide enough cash to service the debt, and more.

“We can pay the interest on our debt, and Social Security and Medicare and Medicaid; and we can pay our troops and still have some money left over,” he said.

“There is no question we would have to cut things. But the president suggesting we would have to default on our loans is certainly not true.”

Mr DeMint said he didn’t think refusing to lift the debt ceiling was a “good idea”, but added: “The negative impact of continuing to spend could be far worse than the short-term market fluctuations if we went through a debt ceiling fight.”

Mr DeMint’s decision to leave his South Carolina Senate seat to go to Heritage is itself evidence of the ferment in conservative politics in the wake of Mr Obama’s re-election.

Democrats have won the popular vote in five of the last six presidential elections, and the White House in four of them, and kept the Senate against the odds in 2010 and 2012.

But Mr DeMint is adamant that the problem is not the conservative message, but the Republicans’ sale of it.

“They really have not carried the message in an effective and persuasive way to the American people,” he said. “We know what the country needs. We can prove with good research that these ideas throughout history have worked.”

Mr DeMint was active in trying to pick conservative Republicans to run for Senate seats, angering many colleagues along the way. The candidates he backed had a mixed record.

At Heritage, he is launching a research programme about how Americans perceive conservative ideas about the limited role of government.

For Mr DeMint, the issue is not about fresh ideas, but: “How do we convince the people that the ideas that are best for their lives are the ones they need to support when they vote.”

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