The failure of Congress and the president to provide for the financing of the functions of the federal government is yielding serious consequences. It is widely known that after Aug. 2, the government won’t be able to pay all our country’s bills.
That will make the nations of the world view the United States’ once-solid financial standing in a different and much less positive light.
But a default would also have concrete, ugly economic effects. Just the possibility of a default prompted Moody’s Investors Service to declare that the United States could lose its triple-A bond rating. That would mean higher interest rates on mortgages and car loans, hurting our economy. Not once since Moody’s started assessing the United States’ debt 94 years ago has it failed to give our country its highest rating. But that is a real possibility now, Moody’s says, because Congress and the president haven’t reached an agreement on how to avoid a default.
Doesn’t that give you some indication of the level of irresponsibility in which our elected lawmakers and the president are engaging.
The expected consequences of exceeding our current $14.3 trillion debt ceiling without some resolution on how to continue paying our bills are serious enough. And yet the president has chosen to bring some additional scare tactics into the equation. He and Senate Majority Leader Harry Reid, D-Nev., are suggesting that senior citizens won’t get their Social Security checks if Republicans do not go along with Democrats’ plan to deal with the debt limit by raising taxes.
In fact, various economic analysts have made it clear that Washington can continue to pay Social Security benefits and maintain our national defense and other vital functions of government even under a partial default by focusing available funds on those critical needs first. Our duty to pay Social Security benefits to seniors who are counting on them should and can be fulfilled — and the president should not wield it as a bargaining chip.
Meanwhile, the debt limit should be increased only with corresponding, large cuts in federal spending. It should not be used as a pretext to impose tax increases that will make our already weak economy weaker.