Thursday, October 10, 2013

ABA to Congress: U.S. Must Meet Its Financial Obligations

With the U.S. economy and our nation’s honor at stake, our leaders must do what it takes to raise the debt ceiling, American Bankers Association President and CEO Frank Keating testified today before the Senate Committee on Banking, Housing and Urban Affairs.

In his testimony, Keating emphasized the importance of our country meeting its obligations and not creating any uncertainty about whether we will do so “on time, every time.”

Keating testified that ordinary Americans would bear the brunt of the damage if the United State defaults for the first time in history. The Bipartisan Policy Center, of which Keating is a board member, estimated that the mere prospect of approaching the debt limit in 2011 cost taxpayers nearly $20 billion as nervous investors demanded higher interest on U.S. Treasury Bonds to account for the risk of default. But an actual default would have much more dire consequences, Keating testified.

“If our nation defaults on its nearly $17 trillion in debt, the harm is likely to be measured in hundreds of billions of dollars,” Keating said. “Even the slightest uptick in Treasury rates would cascade through the economy. It would raise the cost for taxpayers to service our country’s debt and would raise the cost of borrowing for businesses, meaning job losses and price increases.”

Read the full press release. Read a full copy of Keating's testimony.

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