[Congressional Record (Bound Edition), Volume 157 (2011), Part 9]
[House]
[Pages 12178-12179]
[From the U.S. Government Publishing Office, www.gpo.gov]




           THE DEFAULT CRISIS AND ITS EFFECT ON AMERICAN JOBS

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
Illinois (Ms. Schakowsky) for 5 minutes.
  Ms. SCHAKOWSKY. Mr. Speaker, I rise today as a member of the 
Progressive Caucus to draw attention to the devastating effects that 
could be caused if the United States were to default on its debt. 
First, let's be clear that raising the debt ceiling will have no effect 
whatsoever on any new spending that the Congress might do. It's simply 
giving the government authority to pay its bills, to pay its bills for 
obligations that the Congress has already authorized.
  Second, while Republicans have attempted time and time again to pin 
the current deficit on President Obama, the facts cannot be denied: It 
was the policies of the Bush years that got us here. It was just a 
decade ago that President Clinton left office not with just a balanced 
budget but a surplus, and the Congressional Budget Office declared in 
2001, ``The outlook for the Federal budget over the next decade 
continues to be bright.'' That quote, of course, came before the 2001 
Bush tax cuts were signed into law; two wars that weren't paid for, put 
on the credit card; two tax cuts that weren't paid for and that mainly 
benefited the wealthy; and a devastating recession that may have been 
prevented, had government regulators not turned a blind eye to Wall 
Street greed. The Bush policies ran up the bills. Those are the bills 
that our country is committed to pay, and those are the bills that need 
to be paid if the full faith and credit of the United States is to be 
protected.
  So now this Republican-manufactured crisis could be solved in 5 
minutes if we simply passed a clean debt ceiling increase, like we did 
seven, eight times during the Bush administration, 18 times under 
Ronald Reagan, and then turned our attention immediately to ways to put 
our fiscal house in order, focusing on the real crisis, which is the 
jobs crisis. Instead, Republicans are choosing to hold our Nation's 
financial standing hostage, with potentially devastating consequences.
  Allowing a default on the debt would essentially be a tax on every 
American family. Interest rates on everything, from mortgages and auto 
loans to credit cards and small business loans, would immediately soar. 
A conservative estimate suggests that the effect of an increase in 
interest rates could cost a homeowner with a 30-year mortgage of 
$172,000 an additional $19,100 more over the life of the loan. A drop 
in the stock market would hit the savings and retirement accounts of 
middle class Americans, less available credit for small businesses and 
consumers, and lower economic growth that could cost hundreds of 
thousands of jobs.

                              {time}  1050

  In addition, if the country can't pay its bills, an unthinkable 
scenario becomes a reality, having to choose between what aspects of 
the government to fund and what bills to pay.
  Seventy million checks are due to go out next Wednesday. Those 
include Social Security and veterans and our military families, and 
these checks are threatened. That is the threat the Republicans are 
willing to make, holding the full faith and credit of the United States 
hostage in order to push for extreme policies that would gut Social 
Security and Medicare and Medicaid and devastate the economy and the 
middle class in order to protect hedge fund managers and corporations 
that ship our jobs overseas. That is what the

[[Page 12179]]

Republicans are advocating, but they are not willing to ask for one 
penny more for millionaires and billionaires.
  We need to deal with our fiscal challenges, and I have offered 
proposals for how to do that in a way that protects the social safety 
net and what is now the disappearing middle class.
  First, we need to create jobs. Putting people back to work will raise 
revenues and bring down the deficit as a proportion of the economy.
  Second, we need to eliminate spending we don't need, such as billions 
of dollars in waste spent by the Pentagon. But we need to protect 
spending on vital programs like Social Security, Medicare, and 
Medicaid.
  And finally, we need to raise revenues in a fair way.
  I've introduced the Fairness in Taxation Act, H.R. 1124, which would 
create new tax brackets beginning at 45 percent for income over $1 
million a year and rising to 49 percent for income at $1 billion a 
year; and yes, there are Americans who make that. And according to an 
estimate by Citizens for Tax Justice, my legislation could raise as 
much as $800 billion over the next 10 years. Those are the types of 
proposals that should be considered so that we can achieve fiscal 
responsibility in a way that protects seniors and children and the 
middle class and all those who aspire to it.
  Right now the American Dream itself is at stake. It is slipping 
through the hands of people that used to be middle class. We cannot 
tolerate that. We need to raise the debt ceiling.

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