WASHINGTON, July 11, 2011 /PRNewswire-USNewswire/ -- In response to RNC Chairman Reince Priebus, the head of the national Republican Party, saying on ABC's Topline today that the August 2nd debt limit deadline is "not the end of the world," DNC Chair Debbie Wasserman Schultz released the following statement:
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"Chairman Priebus is not the first Republican to suggest that it would be fine for the U.S. to default on its obligations and fail to raise the debt limit, but as the head of the Republican Party his comment that doing so is 'not the end of the world' is among the most irresponsible. Never before has the United States defaulted on our obligations and economists agree that going into default would have catastrophic consequences for our economic recovery and repercussions in financial markets across the globe. If we were to default on our obligations our economy could crater and significant pain and hardship would fall on our nation's most vulnerable citizens including seniors, the poor, the middle class and young people.
"This sort of reckless rhetoric is detrimental to the efforts of President Obama and Congressional leaders to find a responsible solution to getting our fiscal house in order in a balanced way and meeting our nation's obligation to pay its bills. Instead of playing politics and risking default to appeal to the most extreme elements of their base, Republicans should use this opportunity to reach a meaningful compromise to put our country on firmer financial footing."
Mark Zandi: Failure To Increase The Debt Ceiling Would Lead To Significant Spending Cuts And A Recession. "'If we get to August 2 and there is no debt ceiling limit, and there has to be significant spending cuts - even if Congress and the administration reverse themselves days later, I think the damage will have been serious, and we probably would be thrown into a recession,' [Moody's Analytics chief economist Mark] Zandi said." [Christian Science Monitor, 6/28/11 http://www.csmonitor.com/USA/Politics/monitor_breakfast/2011/0628/Top-economist-Raise-the-debt-ceiling-or-blow-the-recovery-out-of-the-water]
Failure To Increase The Debt Ceiling Could Result In "The Largest Quarterly Economic Decline Since 1947." The Center for American Progress reported that "a two-month failure to raise the debt limit could result in the largest quarterly economic decline since 1947, when relevant data were first reported. That would obviously be a bigger decline than in any quarter of the Great Recession. And the worst quarter of the Great Recession saw a loss of nearly 2 million jobs." [Center for American Progress, 7/7/11 http://www.americanprogress.org/issues/2011/07/debt_limit_drag.html]
Failure To Increase The Debt Ceiling Would Require A 40 Percent Cut To The Federal Budget, Putting Our Economic Recovery At Risk. "The United States actually already hit the official debt ceiling. But the Treasury Department has been able to delay the real consequences until early August by using extraordinary measures. If Congress doesn't act by then, however, the federal government will be forced to immediately cut nearly 40 percent from its budget. Since government consumption and investment is a major contributor to overall economic activity-contributing nearly 10 percent to gross domestic product last year-the wider economy would suffer from the magnitude and immediacy of the required cuts." [Center for American Progress, 6/3/11 http://www.americanprogress.org/issues/2011/06/frozen_debt.html]
* The Bipartisan Policy Center recently released an analysis on the cuts to vital programs that would occur if the debt ceiling was not raised. http://www.bipartisanpolicy.org/sites/default/files/Debt%20Ceiling%20Analysis%20report.pdf
SOURCE Democratic National Committee
