[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[Senate]
[Pages 11280-11281]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             DEFAULT CRISIS

  Mr. REID. Mr. President, Senate Democrats sat down with Secretary Tim 
Geithner, and he painted a picture of what our world would look like if 
Republicans in Congress force this Nation, for the first time in its 
history, to default on its financial obligations.
  The picture was grim. This is how he described the state of our 
government if Congress allows this unprecedented default: ``Lights 
out.''
  He said default would result in a complete ``loss of capacity to 
function as a government.''
  Even those who believe government should be small enough to drown in 
a bathtub have to admit that a total shutdown of even the most basic 
and essential functions of government is very, very scary. It would not 
be good for the American people, and it certainly would not be good for 
our economy.
  The Senate has no more important task than making sure the United 
States continues to pay its bills for preexisting obligations such as 
Social Security.
  I have spoken to the President's office today. Actually, I had a 
phone call scheduled with him, and he rescheduled it for later. But I 
have talked to his people, and he understands the importance of our 
meeting our responsibilities. Because of that, we are going to stay in 
session every day, including Saturdays and Sundays, until Congress 
passes legislation that prevents the United States from defaulting on 
our obligations.
  I have spoken to the Republican leader. He understands the necessity 
of our being in session. We have a lot to do, not as many things as 
normal but extremely important things that are going to take time. So I 
know it is maybe inconvenient to have people rearrange their schedules, 
but this means Saturdays and Sundays and Mondays we have to be in 
session continuously.
  Secretary Geithner described how the 80 million checks cut by the 
Treasury every day--that is 80 million checks every day--would likely 
simply stop coming. The Federal Government would, in effect, go dark.
  Paychecks for troops in Afghanistan and Iraq and bases around the 
world could stop. FAA towers could shut down. So could the FBI and the 
CIA. Border crossings could close. Safety inspections of the food 
Americans eat and the cargo that enters our ports could halt. Literally 
every function of government could cease--Social Security checks, 
payments to our veterans. We have heard that before. There would be no 
discussion of which operations and personnel are essential. All the 
payments would very likely stop.
  Some have said we could prioritize which bills to pay. Even if that 
would not irreparably damage the Nation's credit and our reputation in 
the global economy and the global community--which it would--it is also 
a complete fiction. Our government will not even be able to cover the 
bills due on August 3. It will simply run out of money. Because we will 
be in default and our credit rating trashed, we will be able to borrow 
the money not again to keep running even if we wanted to.
  That is the picture Secretary Geithner painted. Like I said, it is 
grim.
  Many of my Republican colleagues understand this fact. They know what 
is at stake. It is not blanket for sure, but the irresponsible 
Republicans who say default would not be an unmitigated disaster for 
this country either do not know what they are talking about or are 
twisting the truth for political gain.
  Americans have gotten the message. Seventy-one percent of the 
American

[[Page 11281]]

people disapprove of the way Republicans have used this crisis to force 
an ideological agenda. That is in the press today. Even a majority of 
Republicans disapprove of their unreasonable refusal to compromise, 
which puts our entire Nation at risk.
  Those who say this crisis would be a blip on the radar are wrong. 
Default would be a plague that could haunt and would haunt our Nation 
for years to come. Our credit rating would take years to rebuild. The 
country would never, ever be the same.
  Some will say this is an exaggeration, but it is not. This is what 
Treasury Secretary Geithner told us. That is what business leaders, 
economists, rating agencies, and bankers have all told us. If this 
country defaults on its obligations, they say--Secretary Geithner for 
certain says--it will be ``much worse than the Great Depression.'' It 
would make the massive financial crisis of 2008 look mild. ``It will 
make what we just went through look like a quaint little crisis,'' 
Secretary Geithner said. I repeat: ``It will make what we just went 
through look like a quaint little crisis.''
  That ``quaint little crisis'' led to the loss of almost 5 million 
American jobs. It caused our banking system to nearly collapse. More 
than $34 trillion--Mr. President, that is not million, it is not 
billion, it is trillion--more than $34 trillion in wealth was destroyed 
in less than 2 years. The ripples were felt throughout this Nation and 
around the world.
  The average American family lost $100,000 on its home and stock 
portfolio alone, and 400,000 families were plunged into poverty.
  That crisis was minor, again, Geithner said, compared to the 
potential fallout from a U.S. default. No one should guess from what I 
have said that Secretary Geithner thinks what has taken place because 
of the Wall Street collapse is minor. But it is minor compared to what 
he believes would happen if we defaulted on our debt.
  The leading business and economic voices of our time have said it 
again and again: The risks of default are unthinkable. It would be a 
catastrophe.
  Secretary Geithner also said we are running out of time to avoid this 
iceberg. This huge iceberg is in the ocean, and our ship of state is 
headed toward it. The rating agencies have already placed our AAA 
credit rating under review and could downgrade us at any time.
  This is what Secretary Geithner said. Again, I quote:

       The eyes of the country are on us. The eyes of the world 
     are on us, and we need to make sure we stand together and 
     send a definitive signal that we're going to take the steps 
     necessary to avoid default.

  So, Mr. President, I ask what it will take to get my Republican 
colleagues to wake up to the fact that they are playing a game of 
political chicken with the entire global economy. They must wake up 
soon.

                          ____________________