NORFOLK, Va. - Experts and politicians say there could be a huge impact on Hampton Roads if the U.S. hits the debt ceiling and can no longer pay its bills due to the area's reliance on the military.
"Nobody knows what's going to happen if there's a default," said Dr. Bob McNab, an economist from Old Dominion University, due to the fact it's never happened.
McNab says it would create an immediate recession in Hampton Roads and a depression if it went on for a while.
"With a default, all the debts are off the table. There's no ability for the U.S. Treasury to pick who gets money and that means the Treasury would have to essentially engage in across-the-board cuts," said McNab.
Federal dollars represent about 40 percent of economic activity in Hampton Roads, whether it be from the military, defense cuts, or in other areas.
"It would be like shutting down for COVID-19 in the spring of 2020. Catastrophic would be an understatement," said McNab.
Talks continue on raising the debt ceiling with Treasury Sec. Janet Yellin warning the U.S. could no longer be able to its bills by June 1.
House Republicans have passed their own plan to raise the debt ceiling through next year while also making $4.5 trillion in cuts.
The Biden Administration has said that could lead to massive cuts at the Dept. of Veterans Affairs, which they say would hurt veteran care.
Republicans have countered that the Administration is lying and have said they have no plans to cut care for vets.
Sen. Tim Kaine (D-Virginia) believes Republicans should outline their plans in more detail.
"The House should pass appropriations bills that reflect their philosophy that we need to cut the budget. The Senate should pass our bill to reflect our philosophy, and everyone can see what the options are," said Kaine.
For now, the stalemate continues as economists say the clock is ticking.
"We should not risk a global financial crisis to make a political point," said McNab. "We need some adult, responsible leaders to get in a room and figure this out."
