National debt default debate prompted by government shutdown
WASHINGTON (WJLA) - Still seemingly nowhere near a compromise, both political sides on Friday opted instead for optics.
President Obama took the press to Taylor Gourmet Deli on Pennsylvania Avenue to tout efforts to help out-of-work Washingtonians.
"This establishment is providing a 10-percent discount to all federal workers who are on furlough -- plus a cookie," said Obama.
Republicans touted their new hashtag, #letstalk, while speaker John Boehner tried blunt language to make his case:
"This isn't some damn game. The American people don't want their government shut down, and neither do I."
Congress passed the debt ceiling in 1917 to limit U.S. debt by putting a cap on how much the Treasury can pay for something.
Congress decides how much money is spent, so the law ends up only limiting the government’s ability to pay its debts, and as former Congressman Tom Davis notes, it’s countries like China that now own a good portion of U.S. debt through bonds.
"The bond holders get paid first, so you pay China off before you pay off your Social Security recipients -- if you don't, you'll never be able to borrow anything again," he explained.
If the U.S. ends up defaulting, the Treasury Department warns that credit markets could freeze, the value of the dollar could plummet, and interest rates could skyrocket.
Washington business leaders say Congress should reign in debt, but not default on money already owed – warning that would make a bad situation from the shutdown even worse here in Washington.
Jim Dinegar, CEO of the Greater Washington Board of Trade, said, "We need to put in plans in the future to get this resolved so we're not facing it year after year. But in the greater Washington area, we are taking a hit."