INSIDE NOVA, JARED FORETEK
U.S. Rep. Abigail Spanberger visited Woodbridge Monday to sound the alarm over the looming U.S. debt limit battle, warning of the danger a default would pose to businesses in the area.
“We want to keep Virginia strong, and we know that defaulting on our debt does not keep us strong, meaning it is absolutely not an option for the Virginians I serve,” the third-term member of Congress said at Appliance Connection in Woodbridge. “On this issue, I’ve heard directly from Virginia business leaders who are concerned. They’re concerned about the economic consequences of a possible default, they’re concerned about what that means for Virginia families, employees and business owners and localities like here in Prince William County.”
Spanberger, a Democrat representing Virginia’s new 7th Congressional District, was joined by Robert Sweeney, president and CEO of the Prince William Chamber of Commerce, as well as Marty Nohe, former Republican Coles District Supervisor and owner of Appliance Connection. Together, the three warned of negative impacts for federal workers, higher interest rates and the collapse of market-backed retirement accounts from a possible default, as well as a possible government shutdown.
The U.S. already reached its debt limit in January, triggering “extraordinary measures” from the Department of Treasury to avert default, but experts warn that if an agreement to raise the debt limit is not reached by June, the nation risks defaulting on its obligations, leading to potentially calamitous economic consequences. The debt limit itself is a cap set by Congress, and increasing it does not actually create new government spending; instead, it simply allows the government to pay for what has already been budgeted.
The new Republican majority in the U.S. House of Representatives has said that it’s only willing to raise the debt limit if doing so comes with certain cuts to government spending, though so far Republican leadership has not unveiled a proposal on what spending it would like to see reduced.
Democrats and President Joe Biden, on the other hand, have demanded a clean debt limit bill, insisting that raising the debt ceiling should be treated as a formality meant to ensure that the U.S. government can continue to pay Social Security recipients and continue to issue new debt — the most secure sovereign debt in the world — to pay its bills.
Warning of the suspension of basic government functions and crashing markets, Democrats have said that Republicans should use negotiations on the next budget to try to enact their spending or cutting priorities, but that showdown could ultimately lead to a government shutdown after current government funding expires in September.
On Monday, Spanberger, Nohe and Sweeney highlighted the potential impact defaulting could have on federal employees, many of whom live in Prince William County.
“Failure to raise the debt ceiling will not only impact the good standing of the United States of America, but it could also have dire impacts for the more than 172,000 Virginians who work for the federal government and the nearly 130,000 active duty servicemembers who call Virginia home,” Spanberger, whose new district is mostly comprised of eastern Prince William, Stafford and Spotsylvania counties, said. “As the representative for thousands of these families, I am concerned that a default and its ensuing impacts, combined with gridlock and hyperpartisanship on Capitol Hill, could lead to another crippling government shutdown. The shutdowns have historically hurt the finances and job security of families and veterans across the commonwealth, especially in Northern Virginia.”
Nohe said that when government workers are furloughed during a shutdown, families across the region tighten their belts and spend less, generating less economic activity around Northern Virginia.
Answering questions from the media, Spanberger said there was confusion over what Republicans would like to see cut and that Republican Speaker of the House Kevin McCarthy may have different priorities than the majority’s rank-and-file. McCarthy has said that his party is not looking for cuts to Social Security or Medicare. McCarthy himself may be interested in a clean debt limit increase, but many in his caucus are clearly opposed to the idea.
“We can’t get anywhere close to a default because of the economic impact of even approaching such a time frame at this point,” Spanberger said. “… The challenge is that there are vocal differences that Republican House leadership is hearing from … So I think House Republican leadership is in a challenging position. They have many members who want to do the reasonable and responsible thing of governing, but they have some vocal voices who want to do the opposite. And so it’s not an enviable position, but at the end of the day, we were elected to govern.”