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Joining us tonight is Congressman John Garamendi of California.
Congressman, always a pleasure to have you on THE ED SHOW.
REP. JOHN GARAMENDI (D), CALIFORNIA: The pleasure is mine, Ed.
SCHULTZ: Here we go. The 113th off to a roaring start.
And the question is: do you think the Republicans, to save their own,
to save their own agenda, will they take us into default? What do you
GARAMENDI: They certainly sound like they are. And I`ve got to
believe the American public is so sick of this holding them, the American
public, hostage. That`s really what it`s all about.
And what McConnell said is the hostages that he wants to take with the
seniors, those people that have paid for years into their retirement
program called Social Security and also into their medical program called
How in the world he thinks he can win this by holding seniors hostage
on the things that they have paid year after year for, I don`t understand.
The American public should be really, really sick of this kind of thing.
We`ve got work to do.
SCHULTZ: But, John, do you think they don`t fear the consequences of
defaulting on the country`s debt? I mean, they`re very risque with their
language, and they`re also very direct that they don`t even seem to care at
GARAMENDI: Well, I think they`re going to care. Their supporters --
let`s talk about their supporters, big business. Big business relies
heavily upon the solvency of the American government, on the ability of
American government to pay its bills, and if they`re going to somehow take
us over a new cliff on the debt limit, those folks are going to get really
We`re talking about Wall Street here. They`re the ones that are going
to come after these Republicans and say, hey, wake up, guys, this is us
you`re hurting. To say nothing of the rest of America and indeed the world
who has invested in American bonds.
SCHULTZ: You think Wall Street will be behind the Democrats in this
GARAMENDI: Yes, I do. They`re the ones that sell these bonds, that
process this system. They`re the ones that have invested in their own
various portfolios and funds.
American bonds are extraordinarily important. And if for some reason
they`re downgraded, as they were in the last fight, the hurt goes to Wall
Street. It goes to the international bankers.
They`re going to come after these Republicans. But the American
public ought to be fed up with this kind of hostage taking.
SCHULTZ: Sure. But this is a key point here. Are the Republicans
willing to do irreparable harm to their own party if their own kind, Wall
Street, maybe even the Chamber of Commerce, is not going to like to see the
United States default on its debts because it`s going to disrupt business,
there`s going to be hordes of unemployment, it`s going to have a global
And you`re talking about the public. I get that. The public would
even be even more infuriated.
So is this the bargaining chip the president has? Knowing that they
really don`t want to injure themselves generationally in the political
arena like this. Your thoughts?
GARAMENDI: Well, history is usually a good place to look for what
might happen in the future. In recent history, just this week, we saw what
happens when the Republicans tried to hold again America hostage over the
fiscal cliff so they could get their way. They lost.
SCHULTZ: They got to deal. Yes.
GARAMENDI: They lost big-time.
But, Ed, there`s one other thing here. The American public`s like
that horse you that talked about that you used to ride to go out and take
care of the cattle. That horse had power. It was ready to go. It needed
a sense of direction.
If we in Congress can give the public a clear sense of direction,
there`s just going to be a takeoff in this economy because they`re ready to
build this economy --
GARAMENDI: -- ready to hire people.
But all this uncertainty is really, really detrimental.
SCHULTZ: This is how Republican Congresswoman Cynthia Lummis
described how the debt ceiling works. Here it is.
LUMMIS: When the president runs up the credit card, and when that
credit card hits its debt limit, its limit, he gets to pull another credit
card out of his pocket and start spending again.
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SCHULTZ: Does your colleague not understand the powers of Congress,
or is she intentionally misleading the American people?
GARAMENDI: Well, I think they get caught up in their own talking
points, Ed. You know, the talking points sound good until you actually
read the Constitution. The president has absolutely no authority to
appropriate money, or to spend the money. He has to follow the laws pass
the by Congress, the taxes raised by Congress. He has no authority beyond
The debt limit simply tells the Treasury that they cannot refinance
the bonds, they cannot sell additional notes. But it is in fact the
Congress who has over time, and you mentioned it --
GARAMENDI: -- ten years of war that was never paid for, that has
authorized the deficit. It is us, the members of Congress that do that.
And we can do this. We can put together a plan that over time
actually gets this deficit down. But you can`t do it month by month and
threat by threat.
SCHULTZ: Congressman John Garamendi of California, great to have you
with us tonight. Thanks so much.
GARAMENDI: Always, Ed. Thank you.
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