Ellison: Federal Default Would Cost Local Government

Keith Ellison, Fridley's representative in the U.S. House, warned Friday that failure by Congress to raise the nation's debt ceiling would be costly for individuals and local governments.

Ellison made a two-minute speech Friday afternoon on the floor of the House of Representatives (watch the clip on CSPAN here):

This will, without a doubt, cost a dramatic amount of costs on the American people in almost every aspect of our lives, whether it's in the area of credit cards, mortgages and car notes and many other areas. Our state and local governments' costs will go up. Investors will suffer.

Why would a default or downgraded financial rating for the federal government affect local governments? Cities, counties and school districts could see financial-rating downgrades due to, among other factors, how much they rely on federal funding, reports the StarTribune.

The House went on to pass Speaker of the House John Boehner's bill but it died in the Senate. Later Friday evening Ellison issued this statement from him Friday evening:

At a time when our country is on the brink of a catastrophic default, it is reckless and irresponsible to bring a bill to the floor that not only has no chance of becoming law, but would also devastate the working and middle class. This bill would cost an untold number of Americans their jobs, stunt our already fragile recovery, and destroy vital programs like Medicare, Medicaid, and Social Security. That is why I did not hesitate to vote against this legislation.

The stakes are too high now for us to continue this way. If there were ever a time for Republicans to put aside ideological attacks for the good of the country, now is that time. Never in the history of the United States of America has our nation’s credit been held hostage. If Republicans fail to join us in avoiding default, they will distinguish themselves as a party that has deliberately harmed the American economy because of obstinacy, stubbornness and recklessness.

Ellison also included his debt-ceiling stance in a fundraising message, according to the Associated Press.

President Obama has twice encouraged Americans to contact their representatives in Congress on the debt-ceiling issue—on Friday morning and in a televised address Monday that Ellison praised (see YouTube video) and again Friday morning.

After Obama's Monday evening address, Ellison's office reported jammed phone lines and three times the normal level of incoming communication from constituents, according to the Star Tribune.

Have you contacted your representatives in Congress on the debt-ceiling issue?