Senate Democrats

Reid Remarks On The Economic Consequences Of Default

“If we allow the United States of America to default on its debt for the first time in history, it will be a black mark on our reputation and a financial disaster that will spark a global recession.”

“Yesterday, it was good to see my Republican colleagues come around to the idea of a clean bill to avert default. Cooler heads have prevailed, and Republicans have admitted a clean bill to avoid default should be the standard.”

“But Congress’ work to restore faith in government won’t end with avoiding default. The federal government is still closed for business, causing hardship and heartbreak for millions of American families.” 

Washington, D.C. – Nevada Senator Harry Reid spoke on the Senate floor today regarding the importance of passing a clean, long term debt ceiling increase.  Below are his remarks as prepared for delivery:

This is my opinion: if we allow the United States of America to default on its debt for the first time in history, it will be a black mark on our reputation and a financial disaster that will spark a global recession. That is my opinion. But it is not my opinion alone. I have come to that belief by listening to the most respected economists, bankers and business leaders.

This week, the CEO of American Express, whose company is valued at $78 billion, said this about default: “What’s important to understand is if the United States hits the debt ceiling and is unable to pay its debts, the consequences will be immediate and dramatic… If the U.S. defaults, the [global financial] system literally unwinds.”

His dire warning has been accepted and echoed by reasonable members of Congress, including many Republicans. Even Speaker Boehner admitted in 2011, the last time Republicans forced this country to the brink of default, that failing to pay the bills would be catastrophic. This is what the Speaker said: “Not raising the debt limit would have serious – very serious – implications for the worldwide economy and jobs here in America.”

But this year, Speaker Boehner has seemed willing to risk default, holding the full faith and credit of the United States hostage to extract extreme political concessions.

Yesterday, it was good to see my Republican colleagues come around to the idea of a clean bill to avert default. Cooler heads have prevailed, and Republicans have admitted a clean bill to avoid default should be the standard.

However, Democrats believe a six-week delay of a catastrophic default is not enough to give the economy the confidence it needs to continue growing and recovering. The Senate will vote Saturday on a 15-month measure to ensure the United States government lives up to its obligations, giving the economy certainty and stability over the long term.

But Congress’ work to restore faith in government won’t end with avoiding default. The federal government is still closed for business, causing hardship and heartbreak for millions of American families.

Take the Trowbridge family in Reno, Nevada. Seventeen-year-old Austin Trowbridge was scheduled to receive an experimental bone marrow transplant at the National Institutes of Health. Without the transplant, he could die of the same rare, genetic mutation that took his older brother’s life five years ago. But the National Institutes of Health are shuttered along with the rest of the federal government.  And so the Trowbridge family is waiting and hoping for a solution from Congress.

It is time for Republicans to give them that solution. Reopen the government – the whole government – so kids like Austin Trowbridge can get the treatment they need, so families of law enforcement officers killed in the line of duty can get the death benefits they deserve and so every American family that relies on the federal government to keep them healthy and safe gets the services they have earned. Reopen the federal government. Let’s pay the nation’s bills.  And then let’s negotiate a sensible budget solution that secures our country’s long-term fiscal needs.

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