WASHINGTON, July 15, 2011 /PRNewswire-USNewswire/ -- In an interview today, Governor Tim Pawlenty said, "I wish they didn't raise the debt ceiling." In response to Governor Pawlenty's wish, Democratic National Committee Chair Debbie Wasserman Schultz said:
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"Governor Pawlenty is hardly the only Republican who would prefer that the United States default on its debt, but as a presidential candidate, his words cannot be dismissed lightly. To allow the United States to default on its debt for the first time in our history would be to allow our economy to descend into another crisis – one potentially even worse than the crisis that befell America under the last Republican Administration.
"America cannot afford the kind of reckless leadership that Governor Pawlenty would bring to the table. It's the kind of leadership that left his home state of Minnesota in dire fiscal straits and caused a government shutdown just months after he left the governor's office there. It's the kind of leadership that led to higher taxes for the vast majority of Minnesotans – and higher unemployment across the state. And it's decidedly not the kind of leadership we need today. Republicans like Governor Pawlenty need to put aside their partisan talking points and start thinking about doing what's necessary to protect our economy and safeguard our country's future."
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]
Failure To Raise The Debt Ceiling Would Mean Immediate Cuts To Social Security. "The Bipartisan Policy Center studied Treasury Department receipts and expenditures for August 2009 and 2010 and determined that the government likely would not have enough revenue to pay the full $23 billion payment to Social Security recipients due on Aug. 3[…] 'We should be honest with ourselves what this would be like, and the answer is it would be chaotic,' said Jerome Powell, a former Treasury official in the first Bush administration. 'There is no way to avoid really serious pain.'" [USA Today, 6/29/11]
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]
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]
SOURCE Democratic National Committee
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