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Michele Bachmann calls on President Obama to "tell the truth"

Bachmann: I call on Obama to "tell the truth"
Rep. Michele Bachmann (R-Minn.) says President Obama and Treasury Secretary Timothy Geithner are trying to pass a misnomer to the public about the debt ceiling. CBS

Updated 6:38 p.m. Eastern Time

White House hopeful Michele Bachmann said President Obama is a playing a "dangerous" game when he says he cannot guarantee retirees will get their Social Security checks if the debt ceiling is not raised by August 2. Bachmann called on Mr. Obama to "tell the truth."

"We cannot go on scaring the American people, we need to be truthful. And I call on the president and the Treasury Secretary (Timothy Geithner) to tell the truth to the American people," the Minnesota Republican lawmaker told reporters on Capitol Hill.

The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow, now set at $14.3 trillion, by August 2.

"We don't believe that for a moment," Bachmann said.

Bachmann and two other Republican lawmakers introduced legislation that would make sure military families and bondholders, including China, get paid first if the debt ceiling is not raised by the deadline.

Federal Reserve Board Chairman Ben Bernanke, who served as a top White House adviser to President George W. Bush before becoming Fed chief, has said such a prioritization move would cause unnecessary concerns in the financial markets and would only buy a short amount of time.

"While debt-related payments might be met in this scenario, the fact that many other government payments would be delayed could still create serious concerns about the safety of Treasury securities among financial market participants," Bernanke said last month.

Still, Bernanke said Wednesday that Treasury would prioritize payments on principal and interest to the government debt if the debt ceiling is crossed, "because failure to do that would certainly throw the financial system into enormous disarray and have major impacts on the global economy."

Mr. Obama told CBS News on Tuesday he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

"We were all shocked and appalled that President Obama dangled out in front of the cameras that senior citizens may not get their checks. That is a very dangerous statement to make," Bachmann said.

Lawmakers from both parties want to use the threat of the Aug 2 deadline to work out a broader package on long-term deficit reduction, with Republicans looking to cut trillions of dollars in federal spending while Democrats are pushing for a more "balanced approach" which would include both spending cuts and increased revenue through taxes.

With just weeks before the deadline, that deal remains elusive. Senate Republican Leader Mitch McConnell unveiled a complicated back-up plan Tuesday that would allow the debt ceiling to be raised without making cuts. McConnell's plan would effectively hand the burden for raising the debt ceiling over to Mr. Obama, placing the blame on higher spending squarely with the White House.

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