THE BLOG
10/10/2013 05:02 am ET Updated Jan 23, 2014

Impact of Failure to Raise the Nation's Debt Limit

Today, the Treasury Secretary will testify before the Senate Finance Committee -- I serve on this committee as Chairman of the Subcommittee on Health. Here are the remarks I plan to deliver during the hearing:

Mr. Chairman, I appreciate that you called this hearing to highlight a critically important topic. I also want to thank Secretary Lew for appearing before the Committee, during what I know is a very busy time.

I regret that we have to be here today to talk about the consequences of failing to raise the debt ceiling. I am sorry that we have to even think about the consequences of inaction. Failing to raise the debt ceiling will hurt all West Virginians and all Americans. Defaulting on our debt could lead to interruptions in Social Security payments and veterans benefits. It could lead to increased interest rates when families buy a home or car. Pension funds and retirement accounts could see their values plummet.

Earlier this week the president said that America should not have to pay a ransom in exchange for the authority to pay its bills. I agree. What's happening here in Congress is reckless behavior. The very fabric of our economy that we've worked so hard to fix after the recession is being threatened in a selfish effort to push unrelated policies and political agendas.

I cannot fathom how we reached this place, where elected men and women are willfully putting the economic security of their own constituents at serious risk. Last week, those who are blocking government funding said it was because of Obamacare. This week, that rationale has fallen apart, so they're flailing around for other excuses. We need to focus on passing a clean CR now, and in the coming week we have to focus on passing a clean debt limit increase. The CR passed by the Senate has the votes to pass, but Speaker Boehner has to allow it to come for a vote before the full body. The clean debt limit I suspect could also pass, but I fear it will be subject to the same efforts of obstruction.

It is technically true that we can't say for sure what the consequences will be if we do not raise the debt limit. But that is because we have never been foolish enough to consider default. Today, the expert predictions of nearly every leading economist dictate that failure to raise the debt ceiling will weaken the economy, hurt American jobs and retirement savings, and raise interest rates on loans and credit cards. Further, the U.S. Treasury says default could plunge our economy back into a recession as dire as the recession caused by the collapse of the financial markets in 2008. That is frightening. We all remember vividly the very personal impacts of the recession. Some people are still dealing with the economic fallout. Some may deal with it for the rest of their lives.

We heard countless stories of people who had been employed their entire lives, who lost their jobs and what they went through psychologically when they had to apply for unemployment. We all knew people in our communities who sacrificed so much of their savings just so their children could eat and have health care. We watched as people lost their lifelong homes, businesses they built from scratch, and their hard-earned retirement savings. And we heard heartbreaking stories about parents who had to tell their college students they could no longer pay for the education they dreamed of. I can't imagine anyone wanting to relive that. So I find it unconscionable that some here in Congress see no problem with taking more unnecessary risks that could again devastate our economy as a whole.

Congress has raised the debt ceiling ten times since 2001 under both Democratic and Republican Presidents. It is a routine matter for the Congress because it simply ensures the United States pays for the debts that we have already incurred under laws previously approved by the Congress. The time for great debate is when we are enacting the laws that spend taxpayer money, not after the debt comes due for the money already lawfully spent.

None of us sitting up here would advise our family, our friends, or our constituents to stop paying their debts. We know that is ludicrous advice. But today there are some Members of Congress who are so obsessed with repealing the Affordable Care Act, and crippling government and the countless services it provides to the American people, that they are pushing a dangerous misinformation campaign and making light of the implications of default. I believe that these people have no regard for our economy's health. I also believe they have no regard for the long-term economic security of their constituents. These reckless efforts, which they try to veil as attempts to curb government spending, are deeply misguided and put our country, and the global economy, in jeopardy.

We have already enacted major spending cuts. The fiscal cliff deal enacted on January 1 of this year took strong steps to reduce the deficit and restore our fiscal solvency, in part by making more than $2 trillion in budget cuts. Many of these cuts were truly hard on West Virginians. Essential services, including housing and nutrition that so many West Virginia families need, were cut back. So I do not want to hear from anyone that the sequester happened and no one got hurt. That is not true.

In recent budget negotiations, Senate Democrats accepted budget cuts requested by House Republicans. The continuing resolution we passed, and that Speaker Boehner refuses to bring to a vote in the House, locks in these painful cuts for another year. House Republicans say they want more, but they cannot articulate what more they want.

At the beginning of this Congress, then-Treasury Secretary Geithner wrote to Congressional leadership. He shared the following quote from Ronald Reagan, with the hope that my Republican colleagues would especially take heed.

In 1987, President Reagan said, "Unfortunately, Congress consistently brings us to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket. Instability would occur in financial markets and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility - two things that set us apart in much of the world."

If my colleagues won't listen to my arguments for why we must not delay and vote to raise the debt ceiling, I do hope they listen to President Reagan.

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