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The top Democrat on the House Intelligence Committee has warned that China and Russia would seek to exploit the chaos resulting from a U.S. default. He further cautioned that the U.S. dollar\u2019s reserve currency status could be eroded if the U.S. defaults on its debt obligations.<\/strong><\/p>\n Congressman Jim Himes (D-CT), the ranking Democrat on the House Intelligence Committee, warned Sunday during an appearance on CNN\u2019s \u201cState of the Union\u201d about the risks of the U.S. defaulting on its debt obligations.<\/p>\n The lawmaker was asked whether the current U.S. \u201cdebt crisis\u201d is \u201ca national security threat\u201d and whether any world leaders have expressed concern to him about it. Avril Haines, Director of National Intelligence, informed the Senate last week that Russia and China would try to exploit the chaos resulting from a U.S. default to show that \u201cWe\u2019re not capable of functioning as a democracy.\u201d<\/p>\n Himes replied, \u201cIt has not come up in the meetings that we had in Jordan and Israel and Egypt,\u201d emphasizing:<\/p>\n But, of course, the Russians and the Chinese would seek to exploit it. The United States has never really come close to defaulting on its debt before. So it\u2019s hard for us to imagine what that might look like. But, of course, it could be catastrophic.<\/p>\n<\/blockquote>\n \u201cFrankly, the full faith and credit of the United States is the bedrock on which the global financial system is built,\u201d he noted.<\/p>\n The congressman stressed that if the U.S. debt default comes into question, \u201call kinds of things could happen.\u201d He warned:<\/p>\n The U.S. dollar could \u2026 its position as the global reserve currency could be eroded. People may choose to invest in the United Kingdom or in the European Union, rather than the United States.<\/p>\n<\/blockquote>\n U.S. Treasury Secretary Janet Yellen said last week that the Treasury may not be able to pay all of the government\u2019s bills as early as June 1<\/a> \u201cif Congress does not raise or suspend the debt limit before that time.\u201d<\/p>\n On Sunday, Yellen also warned on ABC\u2019s \u201cThis Week\u201d that if Congress fails to act on the debt ceiling, it could lead to a \u201cconstitutional crisis\u201d with implications for financial markets and interest rates. Additionally, she cautioned that not raising the debt ceiling would result in a \u201csteep economic downturn\u201d in the U.S. The Treasury Secretary said:<\/p>\n There is no way to protect our financial system and our economy other than Congress doing its job and raising the debt ceiling and enabling us to pay our bills. And we should not get to the point where we need to consider whether the president can go on issuing debt. This would be a constitutional crisis.<\/p>\n<\/blockquote>\nU.S. Lawmaker\u2019s Debt Default Warning<\/h2>\n
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