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A federal default would hurt Georgia

Posted: October 1, 2013 - 11:00pm

Has Washington gone crazy? It was tempting to think that as Republicans fought with Democrats to a standstill, pushing the federal government into a shutdown.

Republicans such as Georgia Rep. Tom Graves were refused to pass a funding bill unless it included amendments to either defund or delay the Affordable Care Act.

Democrats, including President Obama, said the healthcare act was not going to be changed.

The prospect of a government shutdown, however, isn’t really that troublesome. We have had them before – most recently in 1996 when Newt Gingrich was the House speaker – and the republic has survived.

The more important question is whether Congress will vote to raise the debt ceiling so that the federal government can pay bills it has already incurred.

The deadline for that decision is Oct. 17, and if Congress doesn’t raise the debt limit, the U.S. will default on the promises it has made to pay off treasury bonds.

What would happen in the event of default is not easy to predict.

Closer to home, a default could endanger major projects in Georgia that depend on the ability of the federal government to keep providing money.

The State Road and Tollway Authority is in the process of applying for a $275 million federal loan to help pay for construction of the Northwest Corridor toll lanes in Cobb and Cherokee counties, the largest highway project in the state’s history.

If the federal government defaults, the tollway authority can probably kiss that loan goodbye.

The Department of Energy agreed to guarantee more than $8 billion in loans to help Georgia Power pay for two nuclear reactors at Plant Vogtle.

The loans have not been finalized, however, and negotiations are still underway between the federal government and the utility giant.

If the U.S. is pushed into default on Oct. 17, it won’t be in a position to guarantee $8 billion in loans – which could eventually result in Georgia Power’s customers paying much higher electricity rates to get the Vogtle project completed.

There is a lot at stake here. We need elected officials with clear heads to get this situation sorted out so that the federal government can do such things as help Georgia with its infrastructure upgrades.

It was encouraging to hear Sen. Johnny Isakson provide some of that clarity last week when he stood on the Senate floor and explained why he would not agree to filibuster a measure that would keep the government in operation.

Texas Sen. Ted Cruz was urging a filibuster because he said it would stop Obamacare from taking effect.

Like his Republican colleagues, Isakson opposes Obamacare, but he pointed out that a government shutdown would not halt the implementation of the healthcare law.

“What a lot of people don’t realize is, you shut the government down, you’re not shutting down Obamacare” he said.

“A great percentage of that is mandatory funding. If you shut the government down, you’re actually encouraging Obamacare, and discouraging our government to function as it should.”

“The people of Georgia sent me here to take action, not to avoid action,” Isakson said. “They sent me here to run the government, not to shut the government down.”

That may have been the sanest remark uttered by a Washington politician the whole week.

(Tom Crawford is editor of The Georgia Report, an internet news service at gareport.com that reports on government and politics in Georgia. He can be reached at tcrawford@gareport.com.)

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Comments (1)

Sweet son

Well Tom you and the Demodumbs should look at the big picture!

Not only would the failure of Congress to raise the debt ceiling affect the projects that you mentioned but is would probably also impact the set asides that the Dems and most of their free ride voters get.

So would you like to see one unpopular 'program' stop or reduce all of the other Federal guvment giveaways?

The other thing to thing about the deal is that a great majority of the federally furloughed employees are Demodumbs. I hope they start hollering enough that Obama and the Dems give up.

Hope that makes sense.

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