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Debt Crisis: Isle residents swamp Hanabusa with questions, fears

By B.J. Reyes

LAST UPDATED: 1:51 a.m. HST, Jul 27, 2011

Hawaii residents concerned over the potential loss of Social Security, Medicare and other federal benefits if Congress is unable to reach a deal to raise the debt ceiling flooded a "telephone town hall" by U.S. Rep. Colleen Hanabusa to seek answers on what to expect if a compromise is not struck by Tuesday.

The afternoon public conference call to Hanabusa at her Washington, D.C., office on Tuesday reached a peak of 889 callers on the line at the same time, according to a spokeswoman, with hundreds more who called in for all or part of the session.

"If both sides cannot come to an agreement, what's going to happen to our Social Security and disability checks for thousands and thousands of people?" asked one caller. "Can they really not issue checks for us desperate people?"

Hanabusa attempted to calm fears while also explaining her party's position on the stalemate that has put the country on the verge of a historic default for the nation.

"In the end I do not believe we will have a default," she said.

U.S. Rep. Mazie Hirono, Hanabusa's Democratic colleague, said she too was aware of the concerns in Hawaii and across the country but remained optimistic that a deal could be reached.

"It's still really fluid," she said Tuesday in a telephone interview. "There's still a lot of proposals being put out."

Meanwhile, Hanabusa and Hirono awaited word on when the U.S. House would vote on a proposal.

House Speaker John Boehner postponed a vote Tuesday on a debt-ceiling measure after budget officials said it would cut spending by less than $1 trillion over the coming decade instead of the promised $1.2 trillion. The vote originally scheduled for today is now set for Thursday.

Lawmakers are working against a Tuesday deadline that the White House has said is when the country will have exhausted its ability to borrow money, the rough equivalent to maxing out a credit card, and President Barack Obama has said federal payments could be at risk.

White House spokesman Jay Carney said that officials at the Treasury Department are having discussions with the Office of Management and Budget and the Federal Reserve on what steps could be taken to "manage this impossible situation" if the debt limit is not raised by the deadline. However, he did not provide any specifics, and he said the administration continued to believe Congress would act in time.

"Time is running out," Carney said. "So while we remain confident … we also understand some of the anxiety out there because we are pushing this to the last minute."

While optimistic that a deal would be reached, Hanabusa said she expects the president to preserve benefits by whatever legal means necessary.

"As far as your Social Security checks," Hanabusa said, "my understanding is that he will probably issue those checks. It would be a high priority, and we have asked the president to be sure that the Social Security checks issue."

She added that she believes because Social Security is a trust fund that has been paid into by individuals, "the money is in that fund."

"It is solvent until at least year 2036," she said, "so there is no reason why your check should not issue. … I think it's unfortunate that the Social Security — and making seniors feel uncomfortable — is all part of this debate when in my opinion it should not be because that has been paid for."

Hirono said she too had fielded questions from hundreds of senior citizens concerned over the loss of benefits.

"Yes, they are very concerned about any cuts to those programs that will affect their benefits and the care they receive," she said.

But failure to reach a compromise would have an impact reaching far beyond Hawaii, she added.

"It's going to be not just Hawaii that's affected; it's going to be the credit rating of our country," she said. "When our credit rating is lowered, that is going to result in higher interest rates for all kinds of things — students' loans, consumer goods, everything.

"That's going to make it that much harder for our still fragile economic recovery to continue and for us to focus on creating jobs."

The Associated Press contributed to this report.

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