Perry Says Default Fears Are Overblown

HOUSTON — Gov. Rick Perry said he isn’t worried that a failure to increase the nation’s borrowing authority would trigger the kind of economic catastrophe that federal officials, ratings agencies and many economists have warned would occur if the debt ceiling isn't raised. 

“There’s still gonna be revenues flowing in, so I think this threat that somehow or another the world is going to come to an end and the threat of  'We’re not going to be able to pay our bills' is a bit of a stretch,” Perry told reporters in Houston. “Most Americans know this: We’ve spent too much money. We’ve gotten our house in bad shape, and we need to stop spending.”

Financial markets plunged Wednesday on news that the debt talks were still at an impasse just days before an Aug. 2 deadline. After that, officials have warned that the U.S. Treasury won’t have enough money to pay all its bills. In recent days, top administration officials have warned that failure to pass an increase in the U.S. debt limit could trigger financial ruin in an already fragile economy.

Perry dismissed the standoff in Washington as “political theater” and described President Obama’s remarks this week, in a nationally televised address, as “condescending.”

“He wants to spend more, he wants to tax more, he wants to further put America in debt, and Americans I think by and large don’t want that,” Perry said.

Brad Woodhouse, communications director at the Democratic National Committee, said Perry and other potential GOP presidential candidates are playing a dangerous game.

“Rick Perry must be confusing himself with an economist, or he's just doing what other extreme Republicans like Michele Bachmann have done, which is to downplay the obvious and catastrophic consequences of defaulting on our nation's debt for the first time ever for their own political aims,” Woodhouse said. “The full faith and credit of the United States and our gold-plated AAA bond rating is the envy of the world. If Rick Perry doesn't appreciate those consequences then he simply doesn't get it.”

Perry has been stepping up his attacks on the Obama administration as he explores a run for the White House.

The governor, who has criticized a federal government that he believes is too powerful and intrusive, also elaborated on his pro-10th Amendment remark that states should have the right to pass their own laws on such hot-button issues as same-sex marriage. Perry has come under fire from some fellow conservatives, including Republican presidential candidate Rick Santorum, for saying he is “fine” with New York state giving its official blessing to same-sex marriages.

On Wednesday, Perry said that if Roe v. Wade, the 1973 Supreme Court decision legalizing abortion, was overturned, he would also support allowing states to make the procedure legal — or illegal. Perry opposes abortion and same-sex marriage but thinks states should have the right to decide those issues, not the federal government.

“You either have to believe in the 10th amendment or you don’t," Perry said. "You can’t believe in the 10th Amendment for a few issues and then something that doesn’t suit you, you say, 'Well we really rather not have that state decide that.'"

Perry spoke at the Greater Houston Partnership to tout his support of a measure aimed at further restricting what he calls frivolous lawsuits in Texas. The so-called loser-pays bill passed in the recently concluded session of the Texas Legislature.