October 11, 2013

Sen. Warren, Financial Industry Leaders Agree that National Default Would Have Dangerous Consequences

Sen. Warren Says Congress Should Put Down "Economic Equivalent of a Nuclear Bomb" Threatening Middle Class Families

Video of Sen. Warren's Q&A at the Banking Hearing Available Here

WASHINGTON, DC - At a Senate Banking Committee hearing on Thursday, United States Senator Elizabeth Warren (D-Mass.) asked financial industry representatives about the economic consequences of a default on our nation's debt if Congress does not raise the debt ceiling.

"If the very prospect of a default costs us money and costs us our good name, I don't understand why we keep voluntarily raising the prospect of default with all these votes on the debt limit," Senator Warren said.

Senator Warren noted that Congress must determine what the government taxes and what it spends and that the arbitrary debt limit should be replaced with a commitment that the Treasury Department can borrow what it needs to pay the bills Congress has already racked up.  "A U.S. default is the economic equivalent of a nuclear bomb," she said.  "But thanks to this arbitrary debt limit, we routinely arm that bomb and watch in horror then as the clock ticks down to zero. There has to be a better way to do this."  

"I think we should take this option off the table," she continued. "The United States should honor its obligations and pay its bills in full and on time, period."

In her remarks, Senator Warren also said that Congress should take responsibility and act to eliminate wasteful spending, rather than continuing to face manufactured crises every time the debt ceiling needs to be raised.

"...It seems to me that accountability means that we want to reduce wasteful and unnecessary spending, even if those votes are not politically popular," Senator Warren said. "Accountability means voting to close tax loopholes so that wealthy individuals and big corporations are going to pay a fair share here. Accountability does not mean taking easy political votes and then turning around grandstanding over whether or not we're going to raise the debt limit."