National Default Could Be 'Devastating,' Northeast Queens Leaders Say

Northeast Queens elected officials said the potential of a national default amid failed congressional negotiations on raising the debt ceiling could be “devastating” for the communities they represent.

State Sen. Tony Avella, D-Bayside, and City Councilman Dan Halloran, R-Whitestone, both agreed that the expiration of the national debt ceiling could negatively affect services in their districts.

“This could have a devastating effect on the local economy,” Avella said. “For New York City residents, the interest rates on home mortgages could go up. People may not get their Social Security checks or veteran’s checks. Some of the federal money for our city could be held up. This could mean that the American economy is lower in the eyes of everybody else in the world.”

The senator said he believes seniors, disabled residents and veterans could be among the most affected if the U.S. House and Senate do not approve a plan to raise the debt ceiling.

“The people who need government assistance the most would be most affected,” he said. “It’s just horrendous that we are in this situation and that partisan politics plays such a huge role in government. This is on all levels, not just the federal government.”

Halloran said he believed both Republicans and Democrats were to blame for the ongoing crisis.

“First of all, we’ve know we have a debt problem and we’ve known it for the past two decades,” he said. “Negotiations should have taken place six months ago. Both sides, I think, failed. But as a fiscal conservative, I say you can’t force the country to spend money it doesn’t have. There’s no simple answer. We have to stop borrowing and spending on deficit. The interest alone will soon overwhelm the economy.”

The councilman said the lack of an agreement between Congress’s two houses could hurt Wall Street and, therefore, the city’s economy.

Halloran was most concerned on how seniors and children would be affected by a national default.

“A lot of programs in our state are funded through federal grants, whether we’re talking about senior centers or schools,” he said. “If inflation goes up, the cost of living will rise. In the past three years, there have been no cost of living adjustments for seniors. And we could see cutbacks for funding from federal agencies, which could have an impact on the environment, roads and infrastructure.”

On Thursday, The White House threatened to veto emergency legislation backed by House Speaker John Boehner, R-OH, that would raise the debt limit by $1 trillion while making $1.2 trillion in federal spending cuts, The Associated Press reported.