[Congressional Record (Bound Edition), Volume 157 (2011), Part 9]
[Senate]
[Pages 12279-12280]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              DEBT DEFAULT

  Mrs. SHAHEEN. Madam President, I came to the floor this afternoon 
because the United States Government is now less than 1 week away from 
defaulting on its obligations for the first time in our history. As we 
have heard from economists and business leaders across the country, a 
default could result in hundreds of thousands of lost jobs and in 
higher interest rates for every American, yet we are still debating 
whether we should avoid default. It is a very dangerous game, and we 
are risking permanent harm to the American economy.
  I want to examine one consequence of default for a minute. All three 
credit rating agencies--S&P, Moody's, and Fitch--have said a default 
would automatically result in a lower credit rating for the U.S. 
Government. I think we all understand the principle of credit rating. 
It is like the credit scores on record for most of us in our personal 
lives. The better we have been about paying our debts in the past, the 
better our credit score. When we go to buy a house or a car, when we 
ask for a loan, the bank looks at that credit score and decides how 
much interest to charge us. The worse we have been at paying our debts 
in the past, the lower our score and the more money we pay in interest.
  The credit rating agencies are keeping a credit score on the U.S. 
Government. So far, it has been perfect. The United States has never 
failed to pay

[[Page 12280]]

its debts. That is why we have the lowest interest rates in the world, 
and loaning money to the U.S. Government is considered the world's 
safest investment. With a default, that would all change. And here is 
the key: It would change in just minutes, and that change would last 
for generations. If we default, the credit rating agencies will lower 
our credit rating immediately.
  I recently had a conversation with Martin Regalia, the chief 
economist of the U.S. Chamber of Commerce. In that conversation he said 
the market reaction to default would take ``nanoseconds.'' Once we have 
defaulted, we can never unring that bell. Our special status as the 
world's safest investment may never return. We will have increased our 
interest rates for decades to come and maybe even longer. JPMorgan 
Chase said this week that a lower credit rating could cost our 
government $100 billion a year in interest.
  This is the worst kind of wasteful spending because that money 
wouldn't be going to investments in our economy or to secure a better 
future for our children. It would go to nothing. It would do nothing. 
It would be money down the drain.
  We have a path forward. It is the plan that has recently been 
proposed by Senator Reid. There are a lot of things about this plan I 
don't like. I am concerned because I don't think it takes a balanced 
approach toward deficit reduction that I have long called for, and I am 
disappointed that it lacks the $4 trillion in deficit reduction we 
need. But I am ready to support it. And because all the cuts in this 
bill are cuts that Republicans have already supported, they should be 
prepared to support this plan too.
  The Reid plan would cut at least $2.2 trillion of our debt while 
allowing us to avoid default through the end of next year. These two 
elements are crucial to avoiding the lower credit rating we have been 
hearing raised as a concern. We need to provide the markets with some 
long-term certainty that will avoid default, and some proof we can deal 
seriously with our long-term deficits and debt.
  A short-term, 6-month increase, as proposed in the House, would kick 
the can down the road. It won't prevent a lower credit rating. We need 
to end this constant threat of default which is paralyzing our 
government and our economy. The Reid plan achieves this through a 
combination of cuts to our domestic spending, reduced spending on the 
wars in Afghanistan and Iraq, and through targeted cuts to mandatory 
spending. It doesn't raise taxes, and it doesn't touch Medicare, 
Medicaid, or Social Security.
  Again, this is not a perfect plan. I have been on the floor many 
times in favor of a balanced package that includes cuts to spending--
domestic, defense, and mandatory--but also includes increased revenues. 
The Reid plan doesn't achieve those goals, but I do have hope that we 
will get there eventually.
  This is not a proposal I would have written, but I am 1 of 100 
Members of the Senate and 1 of 535 Members of Congress, so I don't get 
everything I want. None of us here in Congress get everything we want. 
That is the nature of compromise. That is the nature of democracy. That 
is why the Framers of the Constitution created checks and balances in 
government. That is why they created two Chambers in Congress and three 
branches of government. When you are a leader in government, you don't 
have the luxury of drawing a line in the sand and walking away. You 
have to be prepared to stay at the table and to give up something.
  I have just laid out what I and I believe many of my colleagues are 
willing to give up in this proposal--our demand for a comprehensive 
balanced plan to reduce the deficit. In exchange, I am willing to 
accept a plan that includes more cuts than any other plan on the table. 
These are cuts that 40 of our colleagues on the other side of the aisle 
have already supported. This is a plan that I think neither side is 
going to love but both sides should be able to accept. It is a plan 
that gets the job done.
  We here in the Senate and in Congress have to get the job done, so I 
urge that we come to the table, we adopt a compromise, and we put this 
debt ceiling vote behind us.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Madam President, we are not in a quorum call?
  The PRESIDING OFFICER. Correct.
  Mr. REID. It is a rare occasion.

                          ____________________