By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
A federal default would hurt state
Placeholder Image

Has Washington gone crazy? It was tempting to think that as Republicans fought with Democrats over the question of pushing the federal government into a shutdown or default.

Republicans like Georgia Rep. Tom Graves were ready to shut the government down unless the Affordable Care Act was either defunded or delayed. Democrats, including President Obama, said the healthcare act was not going to be changed.

The prospect of a government shutdown wasn’t really that troublesome. We have had them before — most recently in 1996 when Newt Gingrich was the House speaker — and the republic has survived.

The more important question is whether Congress will vote to raise the debt ceiling so that the federal government can pay bills it has already incurred.

The deadline for that decision is Oct. 17, and if Congress doesn’t raise the debt limit, the U.S. will default on the promises it has made to pay off treasury bonds issued to finance government operations.

What would happen in the event of default is not so easy to predict. Words like catastrophe, meltdown, and Armageddon are often used to describe the potential impact on the global economy if the U.S. does not make good on its debts.

Closer to home, a default could endanger some major projects in Georgia that are absolutely dependent upon the ability of the federal government to keep providing money.

The State Road and Tollway Authority is currently in the process of applying for a $275 million federal loan to help pay for construction of the Northwest Corridor toll lanes in Cobb and Cherokee counties, the largest highway project in the state’s history.

If the federal government defaults, the tollway authority can probably kiss that loan, and the project, goodbye.

The Department of Energy agreed to guarantee more than $8 billion in loans to help Georgia Power pay for two nuclear reactors at Plant Vogtle. The loans have not been finalized, however, and negotiations are still underway between the federal government and the utility giant.

If the U.S. is pushed into default on Oct. 17, it won’t be in a position to guarantee $8 billion in loans — which could eventually result in Georgia Power’s customers paying much higher electricity rates to get the Vogtle project completed.

There is also the matter of dredging the Savannah harbor so that Georgia’s port facilities can be expanded, a project that Gov. Nathan Deal says is essential to the state’s future economic growth.

The Legislature has already committed $231 million in state funds for the Savannah harbor project, which has a total cost estimated at $652 million. Deal and other state officials have been trying for some time to get the remaining money from the Obama administration.

If the federal government is pushed into default, there likely won’t be money available for the Savannah River dredging or any similar projects.

There is a lot at stake here. We need elected officials with clear heads to get this situation sorted out so that the federal government can do such things as help Georgia with its infrastructure upgrades.

It was encouraging to hear Sen. Johnny Isakson provide some of that clarity last week when he stood on the Senate floor and explained why he would not agree to filibuster a measure that would keep the government in operation.

Texas Sen. Ted Cruz was urging a filibuster because he said it would stop Obamacare from taking effect. Like his Republican colleagues, Isakson opposes Obamacare, but he pointed out that a government shutdown would not halt the implementation of the health care law.

“It (a shutdown) hurts our military, it hurts our health care system, and it doesn’t do anything to stop Obamacare,” Isakson said.

“What a lot of people don’t realize is, you shut the government down, you’re not shutting down Obamacare,” he said. “A great percentage of that is mandatory funding. If you shut the government down, you’re actually encouraging Obamacare, and discouraging our government to function as it should.

“The people of Georgia sent me here to take action, not to avoid action,” Isakson said. “They sent me here to run the government, not to shut the government down.”

That may have been the sanest remark uttered by Washington politician the whole week.

Tom Crawford is editor of The Georgia Report, an Internet news service at that reports on government and politics in Georgia. He can be reached at