Alabama Treasurer Discusses Impact of Possible U.S. Debt Default

Finance


MONTGOMERY, Alabama (WIAT) – As debt ceiling talks continue in Washington, Alabama state leaders said they have reason to worry if the United States defaults.

Overall, state treasurer Bill Poole said there was uncertainty and speculation about what exactly the impact would be.


“How will it work? If there is a default and a solution, how will the Fed and Treasury get through that period?” Poole said. “No one knows the truth, but it’s certainly a concern for those of us who live in the state, as it is for everyone.”

Poole says it’s unclear how the Federal Reserve will help states if the U.S. defaults, but it’s fair to say Alabama won’t get the federal budget.

“From Alabama’s perspective, I don’t think there will be meaningful support from the federal government. We will respond to mitigate the negative impact on the state,” Poole said.

Poole said the best thing states can do to prepare is to stabilize their finances, pass strategic and conservative budgets, and secure funding. He said he thinks Congress is doing a good job of that during this session.

“We believe the state is in as good a position as we can manage at the moment, but again, no one knows exactly what the future holds. So we have to deal with it. No,” Poole said. .

Carol Gundlach is a senior policy analyst at Alabama Allies, an advocacy group that advocates for policies that help the poor. She said there are quite a few programs that can lose money.

“That includes things like housing subsidies and energy subsidies, and many of the programs in this little federal program called non-mandatory discretionary spending are easier to cut,” Gundlach said.

But they are not the only recipients of these programs. Gundlach said practically everyone could see the ripple effects, such as a potential rate hike or a hit to retirement investments.

“It would be absolutely devastating for just about everyone in the state and almost everyone in the country,” Gundlach said.

Gundlach said there are many uncertainties about the likelihood of default, but there is further information that Alabama Allies does not support about some of the program cuts proposed to avoid default. rice field.

The Treasury Department said the U.S. could default as early as June 1 if lawmakers cannot reach a deal on the debt ceiling.



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