Mayor Michael Bloomberg interrupted his own press conference this morning to warn both parties in Washington to put aside their negotiations over solving the nation’s long-term structural deficit and simply raise the debt ceiling.
“If America, for the first time in its history, defaults on its obligations, it would have a catastrophic effect on our financial system – and on our credibility around the world,” the mayor said at a press conference touting the city’s efforts to add more electric cars to its fleet. “It would also take a serious toll on our economy, and that at a time when the nation is still trying to recover from the deep recession. New York City’s economy is on the mend from the financial crisis of 2008, but defaulting on our debt, I think would be a huge setback.”
In Washington the two sides seem further apart than ever after G.O.P. leaders flatly rejected Barack Obama’s call to raise taxes on upper income earners. Earlier today Senate Majority Leader Mitch McConnell told reporters that he did not think a deal on the debt was possible as long as President Obama remains in his office.
But as the mayor points out–and as has often been forgotten– it is not necessary to come to an agreement on taxes or on spending as part of the debate over the debt ceiling. Congress could simply vote to raise it, which would allow the federal treasury to meet its obligations.
“Now, I understand that both parties in Washington have different plans for how to reduce our debt – and I hope they can come to an agreement soon – but that debate should not be tied to the debt ceiling,” Bloomberg said. “America’s good name and credit are just too important to be held hostage to Washington gridlock, and I hope that in the end cooler heads will prevail and an agreement will be reached quickly.”
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