Congresswoman Mazie K. Hirono (D-Hawaii) today called for bringing reason and responsibility back into the debt ceiling negotiations by co-sponsoring, H.R. 2544, the "Don't Default on America's Debts and Destroy America's Jobs Act."
This bill calls for a "clean" vote on raising the debt ceiling without the political gamesmanship threatening our nation's credit and economy. The bill would also call for cancelling Congress' August recess so legislators can pass a job creation plan and a deficit reduction plan. Congresswoman Hirono had earlier voted on a "clean" bill to raise the debt ceiling in May.
"We all agree we need to create jobs, get our economy moving and bring down our deficit," said Congresswoman Hirono. "The President has worked hard to negotiate in good faith with the Republicans. But the brinksmanship and political games that the Republicans have injected into the debt ceiling negotiations are more than just talk and posturing. They are having real, dire economic consequences."
This week, Standard & Poor and Moody's warned that they will likely lower the U.S. government's credit rating. As a result, costs on loans will increase for government, business and homebuyers. It will also prompt losses in stock portfolios and retirement accounts.
If the Republicans do force the government to default, J.P. Morgan estimates that interest rates on Treasury bonds could rise 75 or even 100 basis points. Between mortgages and credit cards alone, a 75 basis point increase would cost consumers an additional $10 billion in borrowing costs yearly. Mortgage payments will increase by over $1,000 per year for the average family. In addition, the S&P 500 index could drop 6.3% in three months, according to estimates from the financial services firm Janney Montgomery Scott. Besides roiling our financial markets, families could lose thousands in retirement savings.
"It's unfathomable that the Republicans have taken us to the brink of default, using programs like Medicare and Social Security, that seniors and middle class families need, as a bargaining chip," said Congresswoman Hirono. "People in Hawaii are very concerned about how we solve this. The "Don't Default on America's Debts and Destroy America's Jobs Act' provides us with the opportunity to do what the President has laid out: create jobs, get the economy back on track and reduce the deficit."