NLC Urges Members of Congress to Cooperate on Fundamental Government Obligations Toward Federal Debt

WASHINGTON, D.C.  – National League of Cities (NLC) CEO and Executive Director Clarence E. Anthony issued the following statement:

“City leaders know a good municipal credit rating is fundamental to good government operations and services. No city in America would risk their credit by treating a potential default as an opportunity for partisan gamesmanship. The National League of Cities (NLC) calls for an end to the uncertainty created whenever a vote on the federal debt limit is necessary to protect the full faith and credit of the United States. Congressional leaders and the Administration must come together to prevent a default on the nation’s debt. According to a letter Treasury Secretary Janet Yellen sent to Congressional leaders on September 8, the U.S. Department of the Treasury will exhaust its extraordinary measures in October.

Given the year of unavoidable crisis we’ve faced together due to COVID-19, now is not the time to prolong an avoidable crisis. Cities, towns, and villages across America are starting to rebuild thanks to the American Rescue Plan Act of 2021’s (ARPA) Coronavirus State and Local Fiscal Recovery Funds, the CARES Act Coronavirus Relief Fund, and other necessary emergency funds. Hitting the debt ceiling could have negative implications for the U.S. economy that could have devastating downstream impacts on municipalities just as they are beginning to recover.

Further, breaching the debt ceiling puts federal funding in peril for essential programs such as the Federal Emergency Management Agency (FEMA) that supports municipalities. Following Hurricane Ida, communities from Louisiana to New York are relying on FEMA for help and any slowdown in funds reaching residents along the storm’s path would be devastating.

NLC hopes that both Congress and the Administration can find a way to work together to raise the debt ceiling before harm is done to our national economy, and particularly to cities, towns, and villages.”