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Kuster Leads 178 Democrats In Calling on Speaker Boehner to End Threat of Government Shutdown and Default

In letter to Speaker Boehner, Kuster and colleagues urge House Republican leadership to publicly declare they will not use threat of a government shutdown or default as leverage in budget negotiations 

Estimates show recent shutdown cost U.S. economy $24 billion, reduced 4th quarter GDP growth by 0.6 percent, and triggered higher interest rates that added $100 million to deficit in final week of shutdown alone 

Kuster to Boehner: No More Shutdowns

WASHINGTON, D.C. – As lawmakers from both parties begin to negotiate a long-term budget agreement, Congresswoman Annie Kuster (NH-02) and Congresswoman Elizabeth Esty (CT-05) are leading a coalition of 178 Democratic lawmakers in calling on Speaker Boehner and Republican leadership to publicly declare that they will not use the threat of another government shutdown or default as leverage in budget talks. Underscoring the economic damage caused by the recent shutdown, the group of lawmakers said that Congress must work together to pass a responsible budget agreement and take the crippling twin threats of a shutdown and default off the table for good.

“We are sending a clear message to the Republican leadership on behalf of the American people – No More Shutdowns,” said Kuster and Esty.

“The 16-day-long federal government shutdown is over and default on America’s debt has been averted, although no one is relieved that this latest crisis ever occurred.  Now, we are deeply concerned that the American people are in danger of another shutdown or threat of default early next year,” the lawmakers wrote. “The most powerful source of uncertainty to American families and businesses is the threat of a government shutdown and default on our debts. That is why we are writing to you to urge you and your leadership to publicly declare that you will not again use the threat of a government shutdown or default as leverage in the important discussions regarding long-term deficit reduction and economic growth.”

Earlier this month, Kuster was part of a bipartisan coalition of lawmakers that voted for a compromise measure that ended the shutdown, prevented a default, and gave Congress more time to work together on a balanced, long-term budget agreement. During the shutdown, Kuster wrote an op-ed calling on Speaker Boehner to let Congress vote on a simple, bipartisan bill to fully end the shutdown so that Congress could return its focus to helping create jobs and opportunity for middle class families.

 

The full text of the group’s letter is below:

October 31, 2013
Honorable John Boehner
Speaker of the House
Washington, D.C.  20515

Dear Mr. Speaker,

The 16-day-long federal government shutdown is over and default on America’s debt has been averted, although no one is relieved that this latest crisis ever occurred.  Now, we are deeply concerned that the American people are in danger of another shutdown or threat of default early next year.

The most powerful source of uncertainty to American families and businesses is the threat of a government shutdown and default on our debts. That is why we are writing to you to urge you and your leadership to publicly declare that you will not again use the threat of a government shutdown or default as leverage in the important discussions regarding long-term deficit reduction and economic growth. 

The American people depend on their elected representatives to be problem solvers and get our work done. When we fail to do our job, however, it is not the American people who should pay the price for our inability to reach critical agreements. 

The cost to our nation is too high. The absence of paychecks to hundreds of thousands of federal employees during the course of the shutdown caused real economic hardship to those employees and their families and to private businesses whose livelihoods were affected by the shutdown.

Ratings agencies and economists from across the political spectrum agree that the shutdown and threat of default took a real toll on our economy and that the possibility of repeating these crises is causing ongoing uncertainty and economic weakness. 

  • Standard & Poor’s estimated that the recent shutdown cost our economy $24 billion and reduced 4th quarter GDP growth by 0.6 percent. The shutdown triggered higher short-term interest rates, adding $100 million to the federal budget deficit in the last week of the shutdown alone.  And Standard & Poor’s said that the threat of another shutdown and possible default weighs heavily on the economy.  “The short turnaround for politicians to negotiate some sort of lasting deal will weigh on consumer confidence, especially among government workers that were furloughed,” the agency said in its October 16 report.
  • Mark Zandi, chief economist for Moody’s Analytics, “said he has downgraded his projected growth for the gross domestic product for the last quarter of this year from 2.6 percent to 2.1 percent because of the shutdown and simply the threat that Congress would not raise the debt ceiling on time,” according the Times-Tribune of Scranton, PA.
  • Joel Naroff, founder of Naroff Economic Advisors, said the “shutdown trimmed fourth-quarter growth by 20% – an outcome any business would ‘consider a disaster’,” according to USA Today.
  • Gennadiy Goldberg, economist at TD Securities, said, “’The recovery is on hold for another four months,’ citing the unresolved differences in Washington over the government budget,” according to Thompson/Reuters.
  • And Adam Posen of the Peterson Institute for International Economics said, “This will accelerate the rate at which the Chinese renminbi becomes accepted — at least throughout Asia — as an alternative to the dollar, or Chinese government bonds become accepted as an alternative [to U.S. Treasurys],” according to National Public Radio.

This sobering economic hardship should have never been visited upon the American people. The shutdown and threat of default were unnecessary and costly. 

Congress has voted itself 90 days to reach a long-term budget agreement. We respectfully request that Congress work hard to reach an agreement sooner than that and that you and your colleagues in leadership remove the threat of another shutdown or default on America’s debt as a weapon in these talks.

We are working in good faith to meet our responsibilities and achieve the goals set out in last week’s agreement to open the government and avoid default.  All House Democrats and some Republicans voted for that agreement.  By acting now to take the threat of another shutdown or default off the table you can provide certainty and economic relief that American families and privates businesses desperately need.

Shea-Porter Urges Speaker Boehner to Stop Playing Games with U.S. Default

CSP Official PhotoWASHINGTON, DC – Building on her efforts to end the government shutdown and put Americans back to work, Congresswoman Carol Shea-Porter (NH-01) today called on Speaker of the House John Boehner (R-OH) to stop threatening default, end the government shutdown, and work across the aisle on a bipartisan budget that grows the economy and creates jobs.

In two days, the United States is slated to exhaust its borrowing authority, resulting in self-inflicted wounds that could cripple economic growth, create uncertainty for families and businesses, and drive the country back into recession. Increasing the debt limit does not authorize new spending nor does it increase the deficit. It simply allows the Treasury Department to pay the bills Congress has already incurred.

“Instead of taking our country to the brink of default, Washington Republicans should reopen the government and ensure America pays its bills on time so we can negotiate a bipartisan budget and focus on growing the economy,” Shea-Porter said. “For Speaker Boehner to allow the Tea Party faction of the Republican Party to put its ideology ahead of the health of the U.S. economy and financial security of New Hampshire families is irresponsible and unacceptable.”

In recent days, Senate Democratic and Republican lawmakers have held multiple meetings over a bipartisan approach to ending the government shutdown and raising the debt ceiling. To date, House Republican leaders have refused to bring a bipartisan funding bill up for a vote. Today, Speaker Boehner discussed introducing legislation that would only raise the debt ceiling if parts of the Affordable Care Act were repealed or delayed, such as removing requirements that employer-offered health insurance cover birth control and other forms of contraception.

“These partisan politics are exactly what Granite Staters hate about Washington,” Shea-Porter said. “This shutdown has now dragged on for two weeks, and that’s two weeks too many. It’s time to re-open our government, pay our nation’s bills, and work together to create jobs.”

Economists and politicians have widely agreed that failure to raise the debt ceiling will have significant negative consequences on the U.S. economy.

President Ronald Reagan: “The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate.”

Judd Gregg, Former Republican Senator from New Hampshire: “Defaulting on the nation’s obligations, which is the alternative to not increasing the debt ceiling, is not an option either substantively or politically. A default would lead to some level of chaos in the debt markets, which would lead to a significant contraction in economic activity, which would lead to job losses, which would lead to higher spending by the federal government and lower tax revenues, which would lead to more debt.   It understates things to say merely this is not a smart position to put forward. It is a terrible policy that would produce immense economic disruption and very difficult times for people on Main Street.”

U.S. Chamber of Commerce:  “The U.S. Chamber respectfully urges the House of Representatives to raise the debt ceiling in a timely manner and thus eliminate any question of threat to the full faith and credit of the United States government.” [letter to Congress, 9/18/13]

Ben Bernanke, Chairman Federal Reserve Bank: “A government shutdown, and perhaps even more so a failure to raise the debt limit, could have very serious consequences for the financial markets and for the economy.”

Mark Zandi, Chief Economist at Moody’s Analytics: “It will be devastating to the economy… Consumer confidence will sharply decline, investor confidence, business confidence. Businesses will stop hiring, consumers will stop spending, the stock market will fall significantly in value, borrowing costs for businesses and households will rise.”

Bloomberg Editorial Board: “A default could trigger a global crash.”

Steve Bell, Senior Director for Economic Policy at the Bipartisan Policy Center: “I don’t know any serious person who doesn’t think this will be cataclysmic.”

Washington Post: “[A] debt-ceiling breach would push the economy into a free fall…The Obama administration will have to decide whether to delay — or possibly suspend — tens of billions of dollars in Social Security checks, food stamps and unemployment benefits if negotiations to raise the federal debt ceiling are not resolved this week, experts say, one of the many difficult choices officials will have to make at a time when the government will essentially be running on fumes.”

New York Times Editorial Board: “The Republican-induced government shutdown and the party’s threats to create another crisis next week over the debt ceiling are causing harm internationally as well as at home. They are undermining American leadership in Asia, impeding the functioning of the national security machinery, upsetting global markets and raising questions about the political dysfunction of a country that has long been the world’s democratic standard-bearer.”

 

NH Congresswomen Weigh In On The So-Called “Full Faith and Credit Act”

Carol Shea-Porter_Official.2010-300x288WASHINGTON, D.C. – Today, the House of Representatives voted on H.R. 807, a bill that would ensure Chinese bondholders are paid before American soldiers in the case of a government default.

After the vote, Congresswoman Carol Shea-Porter issued the following statement:

“I strongly oppose this deeply irresponsible legislation. Middle class families can’t pick and choose which bills to pay, and neither should Congress. 

“H.R. 807 guarantees that if Republicans push our nation into default, bondholders from China and the Cayman Islands would be paid before America’s veterans, Medicare providers, and small businesses. 

“Instead of playing chicken with our nation’s credit rating, Congress should act responsibly and pay the bills that it has incurred.  I, once again, call on Speaker Boehner to appoint budget conferees so Congress can compromise on a sensible budget that ends sequestration, helps create jobs, and responsibly reduces the deficit.”

Congresswoman Annie Kuster also released a statement after her vote:

Ann kuster head shot LG“This bill is nothing more than a plan to default on our nation’s obligations, plain and simple,” Kuster said. “It sets the stage for yet another manufactured crisis that would prioritize payments to China and other foreign creditors over our obligations to seniors on Medicare, veterans, and the men and women of our Armed Forces.”

“Rather than simply bracing for default, both parties need to work together to reduce the deficit in a balanced way that will help create jobs, grow the economy, and strengthen the middle class,” Kuster added. “As we do, Congress must reassure creditors and the American people that our government will continue to meet its obligations and avoid a catastrophic default. Any suggestion that we would even consider doing otherwise would be irresponsible, undermine confidence in our government, and put our credit rating at risk.”

 

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