Columbia Standard

The U.S. has reached the federal debt ceiling, and Columbia Mayor Steven Benjamin has issued a statement from his office about his thoughts on the issue.

Benjamin issued his formal statement on Wednesday, Oct. 6, "Economic consequences of default on state and local government" in which he discusses how the U.S. being unable to pay its obligations may result in a recession, faltering economic growth, rising unemployment and millions of job losses.

"Lawmakers on both sides of the aisle have always ensured the U.S. does not default on its obligations. This isn’t partisan. Congress must act this week to raise the debt limit, as it did in bipartisan fashion 3 times under President Trump & 80 times since 1960," Benjamin wrote in a tweet. 

According to the U.S. Government Accountability Office, while the U.S. did initially reach the statutory limit, or ceiling, as of Aug. 1, after Congress suspended it through July 31, 2021 by way of the Bipartisan Budget Act of 2019, the Treasury Department had predicted that if Congress did not act before October, the U.S. would default for the first time in history. 

There are extraordinary measures the Treasury can use to temporarily manage debt near the ceiling such as temporarily suspending certain investments to federal employee retirement funds and cashing out its own investments, but once all extraordinary measures are exhausted, the Treasury would have to wait for the approval of Congress for any further actions.

Through interviews of budget and policy experts and an interactive web forum, the U.S. Government Accountability Office has identified potential approaches: link action of the debt ceiling to budget resolution so decisions on borrowing and spending are made simultaneously; allow the administration to propose raises to the debt ceiling, subject to a congressional motion of disapproval; and allow the administration to borrow as necessary to fund laws enacted by Congress and the president.

Mayor Benjamin, in his statement, notes that with the debt ceiling having been reached, state aid and state-run programs that are federally funded could be halted. Such programs could include disaster relief, Medicaid and children's health insurance programs, infrastructure funding, education, public health and child nutrition.