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'Catastrophic economic consequences' could result from hitting debt ceiling

Joe Wilson

U.S. Rep. Joe Wilson, R-S.C., sat down with News 12 Wednesday to discuss America's debt crisis. (WRDW-TV / June 29, 2011)

News 12 at 11 o'clock / Wednesday, June 29, 2011

AUGUSTA, Ga. -- President Barack Obama has some harsh words for members of Congress.

"Malia and Sasha generally finish their homework a day ahead of time. Malia is 13, Sasha’s 10. It is impressive. They don’t wait until the night before. They’re not pulling all-nighters. They’re 13 and 10. You know, Congress can do the same thing. If you know you got to do something, just do it,” President Obama said in a news conference Wednesday.

He's talking about the nation's climbing debt, which is now more than $14 trillion, and it may hit the ceiling in about a month or so.

If the problem hasn't solved by August 2, the U.S. legally won't be able to borrow any more money. News 12 sat down with U.S. Rep. Joe Wilson, R-S.C., for answers.

"This is a very important issue -- the debt ceiling -- and I hope the President focuses on how important it is to address having real reform," Rep. Wilson said.

What's the President's suggestion to cutting from the debt?

"The tax cuts I’m proposing we get rid of are tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners," Obama said.

That means those people would pay new taxes, and Rep. Wilson is opposed to that.

"I don't think the president understands that by raising taxes he is creating a circumstance of killing jobs," he said.

What's Congressman Wilson's answer?

"We must have substantive reductions in spending. They must be verifiable," he said. "We should consider -- and I support -- a balanced budget amendment."

But a bill that would reduce spending has still not been drawn up, as the debt continues to climb and the August 2 deadline looms closer each day.

If a deal isn't reached, some predict Social Security checks won't be sent out and military pay could dry up -- the U.S. economy could even slip back into a recession.

"If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant and unpredictable. And that is not a good thing," Obama said.

Meanwhile, Treasury Secretary Timothy Geithner has urged Congress to raise that limit, so the country does not default. He said that if we do default, it could create "catastrophic economic consequences for citizens."

The U.S. has raised the limit 74 times since 1962, but this time around, lawmakers -- particularly Republicans -- are saying it's time to put a freeze on that growing number.

U.S. Rep. John Barrow, D-Ga., told News 12 in a statement he doesn't believe just raising the ceiling will fix the problem. He says spending cuts are needed.

To read Congressman Barrow's full statement, see below.


Statement from Congressman Barrow:

"If America defaulted on its debts, we’d set recovery back indefinitely. But raising the debt ceiling by itself isn't a solution, either. We need to fix the problems that forced us to raise the ceiling in the first place. The President needs to be more engaged and start working with us on a pragmatic, feasible plan that will include the kind of spending cuts that will prevent us from ever having to do this again."

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