Gov. Fallin expresses deep concern over “huge impact” of possible federal default
Published: July 25th, 2011
While discussing the Sooner State’s comparatively upbeat economic news, Oklahoma Gov. Mary Fallin today (Monday, July 25) expressed deep concern over a potential federal default if the U.S. government debt ceiling impasse is not resolved.
Fallin said a federal default would “have a huge impact on our state.” Failure to sustain America’s positive ranking with bonding agencies and in the eyes of national and international investors would effect states and municipalities in terms of “bonds, interest rates, education spending, Medicare, Medicaid” and many other areas.
Fallin said the nation’s governors were completely focused on the default threat at recent meetings she attended. “The biggest threat is the slowdown of the nation’s economy this could cause.” Although Oklahoma is thriving compared to many other states, she predicted the debt crunch “would slow down our economy” and threat to “bring it to a halt.”
Fallin estimated the state would suffer from loss of even part of the $24 billion in estimated U.S. national disbursements in Oklahoma, a figure that includes not only the $8.7 billion the state government receives from the federal level, but the money spent on military installations, social security and other direct payments.
Fallin said, “I’m believing they’ll find a way” to resolve the federal impasse. Still, she said, “there seems to be more gridlock now” and negotiations among the two houses of Congress and President Barack Obama have been “contentious,” with the approach of a presidential election year.
Fallin believes, “I don’t think it’s a good solution when you can’t give the markets a signal” that fiscal challenges will be bridged. She said that private business leaders had told her in recent weeks that there is at least $1 trillion “sitting on the sidelines” that would be available for immediate investment, but which will not occur so long as the current stalemate continues.