Default is simply not an option

As you may know, the federal government is quickly approaching the restriction on the amount of national debt that can be issued by the U.S. Treasury, known as the “debt ceiling.” Most economists agree we will reach the debt limit in mid-October, at which point the government will default on its loans.

 

The political battle in the days ahead over raising the debt limit will carry serious consequences for the American economy and families. Interest rates on mortgages, auto loans, student loans and credit cards could spike. Retirement savings could take a hit. Our nation’s veterans may not receive their disability benefits and millions of seniors may not get their Social Security checks on time.

 

Default could have more wide-spread impacts on the world economy. When politicians last played politics with the debt ceiling in 2011, America’s credit was downgraded for the first time in history, the stock market tumbled and we added $1.3 billion to our debt.

 

Raising the debt limit isn’t a license for new spending. It only allows America to pay the bills it already has. I am asking my colleagues to end the political brinksmanship – including calls to suspend the debt ceiling contingent on the repeal or defunding of healthcare reform – and provide much-needed stability to the markets. Default is simply not an option.