Paying Our Bills as a Nation
As you know, Congress is engaged in a spirited debate over the Government’s debt ceiling. Recently, members of the House of Representatives had the opportunity to vote on raising the debt ceiling and I voted to support that action. I did so out of strong conviction that the United States has a responsibility to pay its bills on time and in full. Unfortunately, the measure was defeated.
When the next proposal to raise the debt ceiling comes forward, it is likely to be packaged with various measures to address the federal deficit. I am ready to give careful review to the proposal, ever mindful that a failure to raise the debt ceiling will lead the U.S. Government to begin defaulting on its financial obligations in early August.
Raising the debt ceiling has never been a popular vote and, unfortunately, Republicans and Democrats have used this very technical procedure to criticize the other party’s budgetary policies. However, failure to raise the debt ceiling would jeopardize the previously iron-clad guarantee of “full faith and credit of the United States.” Economists across the political spectrum acknowledge that the integrity of our financial markets rests on the promise that the United States always pays its bills. Defaulting on these obligations would damage America’s reputation and could result in a failure to pay Social Security recipients who depend upon those checks after a lifetime of work; failure to provide health services for Medicare beneficiaries who require care; and failure to pay veterans for the pensions they have earned. These are commitments we have already made and that we should continue to honor.
Furthermore, if America’s creditworthiness is placed in jeopardy, the interest rate on our national debt would immediately rise, compounding our budgetary problems. Credit markets would also seize, making it difficult for businesses on Main Street to make purchases, hire new employees, or even maintain current payroll. It would be a replay of the 2008 financial crisis, but quite possibly worse because we are only now digging ourselves out of the recession that followed those frightening events.
I recognize that any final proposal to raise the debt ceiling will likely be coupled with measures to reduce our current debt. In that case, I will look closely at whether the measures to reduce the debt are common sense ones that do not imperil key programs such as Medicare. They should be truly bi-partisan and based on the principle of shared sacrifice among all segments of our society. That means finding savings in current programs but also asking the wealthiest corporations and individuals in our society to contribute their fair share so that we can maintain important national investments.
If we are unable to reach such an agreement in the coming weeks, it will still be necessary to increase the debt ceiling. It is the only option to avoid a severe disruption of our economic recovery and ensure that the United States Government continues paying its bills on time and in full.
We will continue to debate the solutions to our nation’s current fiscal situation. I am ready to have that debate and to find common ground that can move us forward on a comprehensive and responsible long-term deficit reduction package.
Congressman John P. Sarbanes