The Obama administration misled Congress and the American people about the government's ability to function during a temporary debt limit shutdown, according to an investigative report from Republican leadership in the House Financial Services Committee.
During the 2011 and 2013 federal budget and debt limit negotiations, the White House insisted that the only way to prevent a catastrophic default and financial crisis was for Congress to increase the amount of money the government could borrow. If the debt ceiling wasn't raised, the administration repeatedly said that it would not be able to pick and choose which government programs to fund and that the government would completely shut down, reports The Hill.
"I do not believe there is a way to pick and choose on a broad basis. The system was not designed to be turned off selectively," Treasury Secretary Jack Lew said in testimony before the Senate Finance Committee on Oct. 13, 2013, according to The Daily Caller.
But according to the new report based on documents the committee subpoenaed from the Treasury and the Federal Reserve Bank of New York, the administration created contingency plans to continue paying the debt, Social Security and veterans benefits even in the event that the government was unable to borrow funds. The government would continue making the payments "in order to protect the creditworthiness of the United States," according to Federal Reserve documents.
The 322-page report alleges that the Treasury Department lied about its ability to prioritize payments "for the express purpose of creating market uncertainty in an effort to pressure Congress to acquiesce in the administration's 'no negotiation' posture on the debt ceiling."
The documents "show the Obama Administration took the nation's creditworthiness and economy hostage in a cynical attempt to create a crisis so the president could get what he wanted during negotiations over the debt ceiling," said House Financial Services Chairman Rep. Jeb Hensarling of Texas.
Rep. Sean Duffy, R-Wis., chairman of the Financial Services subcommittee on oversight, added: "This report shows President Obama manufactured a crisis to put politics ahead of economic stability. Shame on him. Rather than being honest, the administration deliberately misled Congress and the American people about their ability to honor our commitments to our nation's veterans and seniors. The Administration owes it to the American people to be honest and transparent about its debt ceiling contingency plans."
The lawmakers also charged that the administration refused to cooperate with their investigation and only released relevant documents after receiving a subpoena in May, according to The Washington Examiner.
The "Treasury apparently directed the New York Fed not to answer valid congressional oversight inquiries because Treasury knew the answers would expose the dishonesty of the administration's public statements," the report says.
