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The GOP’s Shutdown & Default Plans: Bad for Businesses and the Economy

The GOP’s Shutdown & Default Plans: Bad for Businesses and the Economy

Today, President Obama will address business leaders at the quarterly meeting of the Business Roundtable. President Obama has been a strong advocate for the business community, and continues to make strides toward strengthening businesses across the country. And yet, after Democrats and President Obama have worked to get the economy back on track, help businesses grow and spur job creation, Republicans are getting ready to turn back the clock on this progress. 

Republican Party leaders like John Boehner, Mitch McConnell, Eric Cantor, Marco Rubio, Rand Paul and Ted Cruz have given the country and their Democratic colleagues a reckless ultimatum. Dismantle the country’s health care law, or we will shut down the government. Just last week 43 House Republicans co-sponsored a bill that threatened to shut down the government over defunding Obamacare. And if Republicans fail to pass a continuing resolution that defunds Obamacare they plan to shift their focus to the debt ceiling debate, an even more dangerous political stunt.

Businesses would clearly suffer if the government was shut down or the United States defaulted on our financial obligations. Why are Republicans so set on playing dangerous political games that put the financial stability of the country at risk? Because Republicans are beholden to the Tea Party leaders who are calling the shots in today’s GOP.

The fact is that Republicans in Congress are so focused on undermining President Obama that they are willing to risk harming the economy rather than cooperate with Democrats. Their far right ideology and desire to get 100% of what they want is taking a toll on businesses and ordinary Americans.

Business leaders are aware that a shutdown or defaulting on our obligations would hurt the economy of America and the world. We saw what happened when Republicans shut down the government in 1995 and 1996 and when Republicans’ reckless brinkmanship in 2011 triggered the first credit rating downgrade in US history.

Today’s GOP has clearly not learned from their past. Yet again, they are threatening the world economy if they don’t get exactly what they want. 

See what business leaders and economists have said about this disastrous GOP plan:

BUSINESS LEADERS AND ECONOMIST WARN THAT A GOVERNMENT SHUTDOWN IS THE LAST THING THE ECONOMY NEEDS AND FAILURE TO RAISE THE DEBT CEILING COULD CAUSE ANOTHER RECESSION

2013: Bank of America Merrill Lynch: “The Last Thing The Economy Needs Is A Repeat Performance. A Key Part Of Our Optimistic Forecast For Next Year Is That There Is Not A Sustained Shutdown This Fall.”  [New York Times, 8/3/13]

2013: New York Times: “Economists Warn That A Default Resulting From A Failure To Raise The Government's Debt Limit Could Tip The Economy Back Into Recession” “While the sequester pinches particular constituencies, and a government shutdown would inconvenience millions, economists warn that a default resulting from a failure to raise the government's debt limit could tip the economy back into recession.” [New York Times, 8/15/13]

2013: U.S. Chamber of Commerce President Thomas Donohue Said “It is Insane Not To Raise The Debt Ceiling” And Pledged To Find Primary Challengers Against Lawmakers Who Threaten Default. “‘It is insane not to raise the debt ceiling,’ U.S. Chamber of Commerce President Thomas Donohue said last week on C-SPAN. Donohue pledged to find primary challengers against lawmakers who threaten a default.” [Associated Press, 9/8/13]

2013: Chief Economist for the National Association of Credit Unions On Failing To Raise The Debt Ceiling: “We Basically Would Default On Our Debt, Interest Rates Would Go Through The Roof, And We’d Fall Into Another Recession, Kind Of Like The One We Went Through In 2007 And 2008.” [Houston News 92 FM, 9/12/13]

2011: THE S&P MADE CLEAR THAT THE NATIONS CREDIT DOWNGRADE RESTED WITH HOUSE REPUBLICANS

Washington Post: “In Its Report Announcing The Downgrade, S&P Was Clear That Blame Rested With House Republicans For Making The Debt Ceiling Increase Conditional On Deficit Reduction.” [Wonkblog, Washington Post, 8/30/12]

Washington Post Plum Line Blog: “The Downgrade Was The Result Of Republicans Turning A Procedural Vote On Raising The Debt Ceiling Into A Hostage Negotiation.” [Washington Post, Plum Line Blog, 8/8/11]

CNNMoney: Republican Demands For Spending Cuts Led “To An Epic Washington Fight That Led To A First-Ever U.S. Credit Downgrade And A Major Disruption In Global Markets.” “House Speaker John Boehner has all but promised an ugly fight over the debt ceiling this year unless GOP demands for spending cuts are met. Sound familiar? The GOP took the same tact last year, leading eventually to an epic Washington fight that led to a first-ever U.S. credit downgrade and a major disruption in global markets.” [CNNMoney, 5/16/12]

THE GOVERNMENT SHUTDOWNS IN THE 1990’S HURT AMERICAN CITIZENS AND BUSINESSES

1996: Atlanta Journal-Constitution: Congressional Republicans “Have Lost Sight Of Their Duties” To Pass A Budget And “Not To Wreck The Economy For Partisan Advantage.”  “The federal budget battle, in progress for months now, is a national embarrassment… The childish tirades of Gingrich and the House GOP freshmen are becoming downright frightening. These Republican lawmakers are so busy attacking Clinton, they have lost sight of their duties. The job of Congress is to pass a budget, not to wreck the economy for partisan advantage.”  [Editorial, Atlanta Journal-Constitution, 1/14/96]

1996: St. Louis Post-Dispatch: The 90s Shutdowns “Played Havoc With The Lives Of Millions Of Americans” And Brought “Federal Contractors To The Brink Of Bankruptcy.”  “Passage of the $ 160 billion bill came seven months after the start of the fiscal year - or five months before it ends on Sept. 30. During the partisan debate, the government shut down twice, the longest government shutdowns in the nation's history, idling hundreds of thousands of federal workers for a total of 27 days. The shutdowns played havoc with the lives of millions of Americans, from tourists turned away from national parks and museums to federal contractors brought to the brink of bankruptcy.”  [St. Louis Post-Dispatch, 4/26/96]

Shutdowns In the 90s Stalled Billions Of Dollars In Private Sector Work On Government Contracts, Toxic Waste Cleanups Stopped, 2,700 Workers Were Laid Off And The Government Lost $14 Million A Day In National Park Revenue.  “Government shutdowns in 1995 and 1996 totaling 26 days stalled nearly one-quarter of $18 billion in Washington-area government contracts. Toxic-waste cleanups stopped at 609 ‘Superfund’ sites, and 2,700 workers were laid off. All national parks closed, costing $14 million a day in lost admission fees and revenue to local contractors and vendors. Most contractors were not compensated for their losses.”  [Wall Street Journal, 4/4/11]

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