Republican Congressman Steve King dismisses the idea the U.S. government will go into default if congress fails to raise the debt limit later this month. Obama Administration officials suggest a debt limit must be raised by October 17th and economists say failure to raise the limit could trigger a massive drop in stock markets around the globe and increase borrowing costs for consumers and businesses.
“I don’t think the credit of the United States is going to be collapsed. I think that all this talk about a default has been a lot of demagoguery, a lot of false demagoguery,” King said today on CNN. “We have plenty of money coming in to service the debt. When we stop servicing the debt, then we’d be in default. We’re a long, long ways from that.”
During the previous partisan fight in the summer of 2011 over the nation’s debt limit there was a 17 percent drop in the value of blue-chip stocks calculated in the Dow Jones Industrial Average, plus Standard and Poor’s lowered its credit rating for the United States.
“I remember the last time we came up to the debt ceiling deadline and there was all of this talk that the Tea Party was going to collapse the economy,” King said on CNN. “Even though the people that were opposed to increasing the debt ceiling essentially gave in and the debt ceiling was increased, they were still blamed for the effect on the markets.”
President Obama has said he will not negotiate on raising the debt limit and it should be a yes or no vote in congress, but Republicans have a growing list of items they want to tack onto a deal, including the go-ahead for the Keystone X-L Pipeline from Canada to Texas and as well as at least a year’s delay in implementing the Affordable Care Act.
“We need to get down to the clear part of this,” King said this morning. “The American people have rejected ObamaCare. The president is willing to put all of that on the line to save his namesake piece of legislation which I think would go down in history as the largest political tantrum ever.”
King made his comments this morning during an appearance on CNN’s “New Day” morning show. A group of CEOs from some of the nation’s largest financial institutions went to Washington D.C. yesterday and told reporters failure to raise the debt ceiling would “extremely adverse” damage to the economy.