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Kilili: Report says Republican debt crisis imperils NMI
Citing information compiled by staff of the U.S. Congress Joint Economic Committee Democrats, Delegate Gregorio Kilili C. Sablan (D-MP) said over the weekend that it may seem like someone else’s problem, but U.S. House of Representatives Republicans’ continuing inaction to raise the debt ceiling will have deeply damaging effects on Marianas residents.
Sablan said in his e-kilili newsletter that without an increase in the amount it can borrow, the federal government will be unable to pay for debt already incurred, putting at risk the $2.7 million Social Security payments that go each month to 3,500 people in the CNMI.
“Health benefits for our 26,000 Medicare and Medicaid recipients are also in jeopardy,” he said.
The delegate said interest rates will rise if the U.S. defaults on its existing debt, adding to inflation.
According to Sablan, Republicans say they want the debt increase to be tied to spending cuts.
He said President Joe Biden asked for a detailed proposal before Congress left for its Easter recess, which has now begun.
“So far, no details on the Republican cuts,” Sablan said.
According to JEC Democrats report, for residents of the CNMI, Republican threats to not raise the debt ceiling could have real consequences for families. The report says even just the threat of breaching the debt ceiling creates uncertainty around whether the U.S. government will pay its bills, which in turn pushes up interest rates and makes borrowing more expensive.
The reports notes that during the 2011 debit limit crisis, for example, mortgage rates went up by 70 basis points (0.7 percentage points), and borrowing costs went up for other types of loans as well.
