Washington (CNN) - Obama administration officials declared Wednesday that there is no fallback plan if Congress fails to lift the nation's $14.3 trillion debt limit by August 2, and they warned that inaction could spark a series of catastrophic events.
"There really is no alternative to raising the debt limit," one senior administration official said at a briefing with reporters. "There is no plan that can preserve our credit worthiness."
A second senior administration official also pushed back on the claim by Sen. Pat Toomey, R-Pennsylvania, that the administration is using "scare tactics" on the issue and asserted that a failure to raise the debt ceiling would be "disruptive" but not "catastrophic" to the economy.
This second senior official said the White House is closely monitoring the markets already. So far "we are not seeing signs of anxiety and concern" because Wall Street has seen Congress fight about the debt limit before only to see both parties come together in the end without the U.S. government defaulting on its debts.
But this second senior official warned that failing to raise the debt ceiling could in fact be catastrophic, especially after a reporter compared the current situation to the fall of 2008, when the markets were rattled after the House of Representatives initially failed to pass the bank bailout during the financial crisis.
To buttress their point that the debt ceiling must be raised, administration officials are using the words of Treasury Secretary Tim Geithner - as well as one of his predecessors from the Reagan administration.
In a May 13 letter to Sen. Michael Bennet, D-Colorado, Geithner warned that "a default would inflict catastrophic, far-reaching damage on our nation's economy, significantly reducing growth, and increasing unemployment."
Administration officials also released a July 8, 1987, letter from then-Treasury Secretary James Baker urging the Democratic Congress to raise the debt ceiling - or else.
"I cannot overemphasize the damage that would be done to the United States' credit standing in the world if the government were to default on its obligations, nor the unprecedented and catastrophic repercussions that would ensue," Baker wrote. "Market chaos, financial institution failures, higher interest rates, flight from the dollar and loss of confidence in the certainty of all United States government obligations would produce a global economic and financial calamity. Future generations of Americans would have to pay dearly for this grave breach of a 200-year old trust."
People who object to rasing the debt limit are endangering our troops and our national security. If we were attacked by another country and forced into an all-out shooting war, we wouldn't be able to fund our military. Even if we do not spend the money, we still need it to protect our national security.
This is "Politics of the Impossible". We have people in Congress who simply do not understand what they are doing and it is impossible to make them see the light of day. Allowing the debt limit to expire is tantamount to treason.
Not rocket science Democrat buffoons. Pay the debt interest with tax revenues first, then prioritize. Cut spending to the non-priorities and stuff that the federal government should not be involved with. Or how about this? Pay the interest debt first then cut 40% across the board on all spending. That is how much we are borrowing.
But I'm sure the Democrats will do everything in their power to chose to further destroy this country with whatever they decide to do, or not do. They are intent on driving this country into bankruptcy so let's just get it over with.
BTW, did Obama and the clueless Democrats even have a Plan A????
Good!!! I am VERY glad there is NO PLAN B!! What that means to me is that the administration is done with the b.s. kowtowing and trying to make nice with these mental eejits; the administration is putting it's rightful foot down and sticking to their guns.
We don't negotiate with terrorists, why should we cave in to our brand of domestic terrorism the RethugliKKKlans?
And before some of you start with the crapola, how many times did they raise the debt ceiling under the Shrub? Six, seven times? And we were'nt even recuperating from a near Depression at the time that was done.
No "Plan B"? What about not spending money? When I run out of money and max my credit cards before my next paycheck hits the bank... In order to survive and still meet all my financial obligations and prevent bankruptcy, I have to stop buying stuff and start selling stuff. The government is no different. Money is money–we all follow the same set of rules when it comes to economics and financial management. I learned how to balance my checkbook in highschool. Did you successfully complete highschool with a passing grade, Mr. President?
Hey remember Greece who Have about 1/100 the economy we have. Their debt crisis almost sank the world economy, last year. Think of Greece, then multiply it by 100, that how much the most powerful country in the free world would devastate the earth economy, if we forfeit on our credit. America will never have the standing it did ever again. The repugs always rail about uncertainty, yet they are willing to use uncertainty and destroy the global economy
It looks like the Democrats may be forced into agreeing to cut spending. This is awful. Just awful. I hope Obama will still be able to put all of those trains in the districts of Democratic congressmen. 2012 is just around the corner and he needs all the support he can get.
If the Rethugs are okay with the catastrophic consequences of them playing hardball, then so be it. They can go back and explain THAT to their constituency as well as their plans for Medicare etc., let's see how that plays out for them.
Enough already with their peculiar,and particular brand of domestic terrorism.
This Republican Congress reminds me of Bush's invastion of Iraq with no "B Plan"'; "A plan" destroy President Obama and no "B Plan" to followup the "A Plan".
How could there be a plan B?
How stupid has the American public (or at least 27%) become?
It's like these people cant\'t comprehend what the debt ceiling is??!!
Not rasing the debt ceiling means we will not pay on our debt.
We all know what that means in real life, why do some people believe what ever nonsense the fox media and right-wing hacks spew out?
"In order to survive and still meet all my financial obligations and prevent bankruptcy, I have to stop buying stuff and start selling stuff."
Selling stuff means raising revenue. For a government, that would mean raising taxes.
And for all you Federal employees yelling about having your generous benefits programs and retirements cut, you're a big part of the problem. Maybe they could just leave your benefits alone and lay you off. That would save even more money. You can't have your cake and eat it too.
The Buffoons in Washington seemingly can’t do anything, unified energy policy, make real cuts in the ridicules budget, create a simplified fair taxing system or an agreed foreign policy. What exactly can they do?
Cut spending. It's a simple solution. Stop giving away money we do not have. Encourage people to work instead of living off the taxpayers and another thing, maybe you should all think about term limits.
The "grass roots" inexperienced Republicans in Congress are wielding far too much power over their more experienced peers. Their only qualification is that they're not the "elite" of Washington. Well, somebody's who's elite enough to understand economics had better step up and take over before these fools run our economy completely into the ground.
FEAR is all the Repugs have.
"Be very afraid – Tea-pends for everyone! "
Comparing the budget of the greatest economic super power in the world with balancing your home budget is just plain dumb. Would you rather be hit in the head by a fruit fly or a meteor?
2010 election spoke loud and clear...time for Obama to move right and cut spending. He will wait until last minute to do so, but we all know how the story ends...Obama caves and debt ceiling goes up just in the nick of time. He gets to say he saved the day, and (much to my displeasure) he may survive 2012 elections (though senate will likely flip to R).
HAD ENOUGH? 9% unemployment, $4-5/gal gas, $1.7 TRILLION deficits, $14 TRILLION debt, Obamacare
Tea Baggers are often a bit nutty, but tyou are an example of a really seriously nutty person giving advice about something you clearly know absolutly nothing of. This is why Tea Baggers can not be trusted to elect any one to anything, becasue Tea Baggers are idiots. If we took your advise, the stock market would likely crash and like a wrench in a fast moving gear, the harm could not be easily fixed. What you are trting to say is that you do not care if the stock market crashes and if it does it is the Dems fault becasue blah, blah, blah, one truthful sounding statement , followed by bold face lies and nonsensical logic.
Let me get this straight: Osama bin Laden had stated all along that the ultimate goal of his terrorism was to destroy the United States as a world power by driving our economy into the ground.
Well, who needs OBL when we have the GOP doing his work for him now that he's being eaten by the fishes? What the Republicans are proposing is nothing short of economic terrorism committed against the USA and the rest of the world.
What is Obama's plan A ?
Answer: blame Bush and raise taxes on the wealthy.
Let's force the right-wing twinkies to face all their fears; the world and our society always continues to evolve!
Their blind faith in old pompus white men running everything has ended (years ago).
No matter how these people try – no one can change history.
The White House shouldn't need a PLAN B if Republicans in Congress would do their job. Republicans have voted to raise the debt ceiling every year for the past ten years and never once complained about it or tried to blackmail the President over it. Just shows Republicans know nothing about economics, governing, or leadership. NO MORE REPUBLICANS in 2012. We need some REAL LEADERSHIP so the Democrats can finish restoring the economy Bush destroyed, getting us out of the 2 fraudulent Bush wars, and fixing the deficit Bush created – all with FULL support of this Republican Party. DEMOCRATS ARE LEADERS WHO GET THINGS DONE. REPUBLICANS ARE LIARS WHO OBSTRUCT EVERYTHING AND HURT THE PEOPLE TO DO WHAT THEIR CORPORATE BOSSES WANT. NO MORE!
"Selling stuff means raising revenue. For a government, that would mean raising taxes."
Not true. The government has plenty of assests they can sell.