For Immediate Release
Tuesday, January 30, 1996
AFSCME Retiree Testifies on Devastating Impact of Federal Default
Washington, DC —A Jacksonville, Illinois retiree, Doris Clark, today told members of Congress that a possible federal default on its obligations would put senior citizens' security in jeopardy.
Clark, president of the Illinois American Federation of State, County and Municipal Employees (AFSCME) Retirees, today testified before Rep. Charles Schumer, Democratic Leader Richard Gephardt, and other members of Congress about the effect a possible debt crisis would have on senior citizens.
"As a senior citizen myself, I'm deeply concerned about the effect of a federal default on my own retirement income. Like almost every other senior I know, my security rests on the 'full faith and credit of the federal government,'" Clark said. "...The United States has never defaulted on its obligations before. If we do that now, we're moving into uncharted waters. How will Social Security be affected? Will checks stop on the day of default? Will foreign creditors end up with a better claim on payroll contributions than will American workers and retirees? What will happen to Medicare?"
Clark went on to voice her concerns about the solvency of her state pension. She told the members of Congress that, faced with a fiscal crisis triggered by a federal default, "our pension fund couldn't redeem our Treasury Notes and Bonds as they came due, and interest owed to us would cease. The overall value of our government securities would surely diminish."
Clark, a former Illinois state employee, concluded her remarks by saying: "If there is any sanity left in Congress, I plead for the security of the oldest Americans...Please don't let our country let us down by defaulting on our trust. No great nation could be so cruel."
Also testifying at today's hearing were Office of Management and Budget Director Alice M. Rivlin; Deputy Treasury Secretary Lawrence Summers; New York State Comptroller H. Carl McCall; and James Lebenthal, chairman of a leading municipal bond house in New York.
