Congresswoman Beatty on the Implications of a Failure to Raise the Debt Limit
On Monday, October 14, Congresswoman Joyce Beatty took to the House floor during the Congressional Black Caucus Special Order Hour to discuss the implications of a failure to raise our nation's debt limit. The Congresswoman's remarks, as delivered, are below.
"It is an honor for me to stand here on this floor with you as a colleague in our freshman class. But first let me thank you for your leadership, and also to Congresswoman Marsha Fudge from my great State of Ohio, as president of the Congressional Black Caucus.
As I stand here tonight, I am reminded of the words of Martin Luther King when he said: The ultimate measure of a man is not where he stands in a time of comfort and convenience, but where he stands at times of challenge and controversy.
Mr. Speaker, I rise today during this time of challenge and controversy to express my strong concern over Republicans' failure to immediately raise our country's debt limit. The failure to act is threatening an imminent default on our Nation's financial obligation.
Raising the debt limit does not grow our deficit. Instead, it allows the Treasury to pay for what this Congress has already spent.
What are the facts? Since 1917, the debt limit has been raised 103 times. In recent history, it has been raised 45 times. As you have heard my colleague state, 18 times during Ronald Reagan's Presidency.
In 273 years since our country's founding we have never defaulted on our financial obligation. Yes, never. But if Republicans refuse to increase the debt limit by October 17, the Secretary of the Treasury has indicated very clearly that we won't be able to pay our outstanding debts on time. Quite frankly, this is unthinkable.
The ``full faith and credit'' clause of the United States Constitution directs that the United States will pay all its debts in full and on time every time.
America's full faith and credit has been the basis for our global economic superiority for at least 100 years. Like ordinary Americans, if the Federal Government does not pay its bills on time, then when it comes time to borrow in the future, the interest rates we pay will be much higher. If the debt limit is not raised, Americans will feel the impact immediately, both directly and indirectly.
Who loses? Payments owed to our soldiers and veterans for their services will be delayed. Nearly 4 million disabled veterans receive monthly payments in recognition of their sacrifice. If we default, they will not receive their benefits on November 1. In my home, the great State of Ohio, 1,183 veterans receive disability compensation. It would be unthinkable for us to fail to pay them, and the benefits that they have earned for their services.
Who loses? If the debt ceiling is not raised more than $36 million, Social Security recipients will not receive their earned benefits. In Ohio, over 2 million residents rely on Social Security to make ends meet. A default in our obligations would force them to choose between paying their rent or buying groceries. It is not a choice that Congress should force on our constituents to make.
Americans will also see a sharp spike in interest rates offered on home mortgages, credit cards, car payments, and student loans. The spike will have an immediate, devastating negative impact on our Nation's housing recovery, which has been a driving force in recent economic growth.
If Americans default, the average homeowner will pay an extra $100 a month in increased interest rates. This will cost families $36,000 over the life of a typically 30-year home loan.
As the stock market reacts to the most significant defaults in modern history, you can expect steep drops in your IRAs and your 401Ks.
Just last week, the Secretary of the Treasury reported that if our Nation were to default on our debts, the consequences would be ``catastrophic''--yes, catastrophic--``with many private sector analysts believing that it would lead to events of the magnitude of late 2008 or worse.''
We are still recovering from the worst recession in 80 years. We simply cannot afford to go backward, to go to double-digit unemployment, declining housing values, the financial markets declining, and a climate of economic uncertainty for businesses.
Americans deserve swift action. I implore House Republican leadership to bring to the floor a bill which will raise the debt limit so the Treasury can continue to pay all of its bills on time.
And lastly, I turn to the other imminent crisis: reopening the Federal Government.
Throughout this hour, you have heard my colleagues talk about the choices that you force Americans to make when you try to piecemeal our funding. It is worth me repeating to say: it is like having a family and having parents having seven children, and decide that you are only going to feed three of them and watch the other four children starve before your eyes.
We stand on this floor as Democrats and Republicans every day and we talk about how we care for this America, how we want to provide services, but yet we are making Americans make a choice between NIH funding for children who are cancer patients, who need to be in clinical trial, and we make a decision to pull the funding, Federal funding, in 11 States that they are losing their Head Start grants. The list goes on and on.
This is not the America I know, this is not the America I love. Americans deserve better.
Let's reopen the doors of government, and let's raise our debt ceiling."