Tester warns Montanans about consequences of U.S. debt default
According to U.S. Treasury, debt ceiling must be raised by November 3
(U.S. Senate) - Senator Jon Tester is warning that if Congress fails to raise the debt ceiling, Montanans' wallets could be seriously affected.
Tester today called on Congress to raise the debt ceiling before November 3 or the government's borrowing authority will run out and the United States will default on debt already owed.
"It will affect every single American, and we cannot afford to let that happen," Tester said. "Credit markets could freeze, the value of the dollar could plummet, interest rates could skyrocket and we could face a financial crisis and recession like we saw in 2008."
Uncertainty surrounding the debt ceiling can negatively impact the nation's economy before the deadline is reached. A recent study by the non-partisan Government Accountability Office found that interest rates increased just prior to raising the debt ceiling in 2013.
The U.S. House of Representatives is expected to vote on a bill that claims to prioritize payments to creditors, like China and Japan, before the U.S. Treasury is allowed to pay the salaries of military service members and law enforcement, as well as Medicare payments for seniors.
Tester noted that while Congress has reduced the nation's long-term deficit by more than $3 trillion since 2010, more needs to be done and the House's proposal would only add to the deficit and debt by spiking interest rates.
"Today, I'm calling on Congress to prevent an economic meltdown, raise the debt ceiling and work together, in a bipartisan manner, to reduce our debt and deficit over the long term," Tester said.