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."
The lack of education evident here is unbelievable. Cut spending 40%? Yeah, let's just throw 50 million people out of work, that will solve everything. Do you own a business or work for a business? Do you have any idea the effect on your quality of life if 50 million people are thrown out of work? Ehhhhh. Bad idea. Next.
No Rudi, raising revenues means selling military bases around the world. It means selling public lands here. It doesn't necessarily mean raising taxes, although since 45% don't pay any maybe they should start.
Without raising the debt ceiling, the US will eventually incur more debt due to higher interest payment in the future. Yes, we do need to cut spending and reform the entitlement programs, but right now, priority is to raise the debt limit so that we can pay for the government to keep operating and pay for the wars that Bush got us into. People argue that we can pay our debt first to avoid default, but we just don't have enough to pay for other essentials like I mentioned above. It is not as easy as just paying our debt first and prioritize later.
People, NOBODY WANTS THE COUNTRY TO FAIL. We just have very different ideas of what our nation should be. Stop blaming ONE party on this. Obama spent. Bush spent. Democrats spent. Republicans spent. We must have a real short attention span in this nation if we can only remember back a few years and believe the party or President in power at that time is solely responsible for all of our problems. Cut spending. Raise taxes. Put our Nation first, and ideology last.
Raise the debt ceiling, cut spending. Benefits = bipartisanship, compromise, and fixed economy, happy American people, which means these thugs (mainly dems) in Washington will get reelected, all any of them care about anyways. It's a win-win-winx10 situation...
Is the US going bankrupt?
When are our incompetant lawmakers going to face reality and "pay down our debt" !
You know what crazy? The goverment if complaining about not having enough money to the fix highways because people are buying "green cars". Are they for real? The Obama advisers are idiot and cant count.
No Plan B? No sorprise. Now they can feel the pain millions of American feel when they cant pay their bill.
Maybe of they stop giving aid to other contries and fix our contry thing would be different.