WASHINGTON, November 6 (RIA Novosti) — The new US congressional leadership is not likely to repeat the debt ceiling “fiasco”, which nearly shut down the US government in 2011 and led to fears of a default, former Republican Senator from Maine, Olympia Snowe said Wednesday.
“I think certainly they [the US House and Senate leaders] don’t want to repeat the fiasco of the debt ceiling crisis in 2011, which could have been avoided,” Snowe stated at a National Journal post-election panel discussion.
Calling the government shutdown crisis of 2011 “self-designed” and “manufactured,” she continued, “I'm sure Senator [Mitch] McConnell will want to avoid getting into a major conflict on that very question.”
McConnell is widely expected to become the US Senate Majority Leader when the new Congress is sworn in on January 3.
“We're not going to be shutting down the government or defaulting on the national debt,” McConnell told press during his first news conference after the 2014 midterm elections.
Snowe warned that in order for the United States to continue emerging from the 2008 financial crisis, there should be certainty in the economy and the private sector.
“We’re in the worst post-recession recovery in our history…and as a result, the economy and the private sector need certainty,” she said. “Establishing certainty when it comes to the debt ceiling is going to be critical.”
The results of the previous government shut-down and talks of a US debt default led to the first ever downgrade of the government’s credit rating by Standard & Poor’s and Moody’s agencies. It also had negative impacts on financial markets, job creation, consumer spending and economic growth, according to reports by the US Treasury.
The debt ceiling is part of a law enacted by Congress which sets an annual limit on the amount of money the US Treasury can borrow to pay for past government obligations. Under the 2014 budget, the US federal debt will reach $17.9 trillion by the end of the fiscal year.