Government Shutdown 2013: Debt ceiling breach 'would be a disaster,' says expert.
WASHINGTON (WJLA) - With the budget starring in the latest Washington drama, there are close eyes on both the financial markets and on Capitol Hill, where some financial and government experts fear that members of Congress may still not understand what they're dealing with.
"They don't understand what this means for their constituents,” says Mark Kennedy, a former member of Congress and Fortune 100 Company Executive. He is looking at the impact of both the government shutdown and the potential breach of the debt ceiling.
"How bad would it be if it's breached? It would be a disaster..." he adds.
Kennedy, who now runs the Graduate School of Political Management at George Washington University, says that higher mortgage costs and higher borrowing costs for small businesses mean less hiring and municipalities struggling to fund pensions due to higher interest rates.
"It's going to have a massive impact on every business, every individual in America, and frankly around the world," he says.
National Economic Council Director Gene Sperling, while speaking to POLITICO on Monday, said that President Obama is willing to negotiate on the budget, but “the President has made clear that the era of threatening default has to be over."
While Kennedy points out that in other nations facing similar struggles, pressure from big business and the markets has led to political compromise, in this particular case, Congress not only needs a crash course in financial management – it needs to put its internal differences aside.
"This is a time when you have to rise above whatever the partisan differences are to get it done," he says.