Nevada treasurer calls the U.S. debt impasse a disturbing 'manufactured crisis'
Updated May 5, 2023 at 11:27 AM ET
If President Biden and Congress fail to swiftly resolve a debt ceiling standoff, the federal government could default on its debt, running out of money to pay the bills as soon as June 1.
The Treasury Department says it's taking "extraordinary measures" to prevent a default, but some state treasurers worry about the impact on their budgets and residents.
Zach Conine, the state treasurer of Nevada, tells NPR's A Martinez on Morning Edition that the threat of default is affecting people's behavior. "Full faith and credit should be a promise that we don't need to wake up in the middle of the night thinking about."
This interview has been lightly edited for length and clarity.
On the response to a potential default on U.S. debt
Zach Conine: Here in Nevada, we are so very concerned that if Congress doesn't get this right, that the impacts are going to be felt in the state for a long time. We're just coming out of an incredibly difficult time for Nevada. And we've had a great recovery. But this threatens to put it all at risk.
On the threat of a potential recession
A Martinez: Now, economists say default could tip the U.S. into a full-blown recession. What happens to a state like Nevada with a high unemployment rate?
Zach Conine: What we always say is that when the rest of the country gets the sniffles, Nevada gets the flu. And that's absolutely going to be the case. You know, we still have an economy that is very, very dependent on travel and tourism. And so if we see protracted job losses, when we see major declines in the market, we see losses right here in Las Vegas. We see losses around the state. People just don't come as much. And that would be an absolutely insane thing to have happen – just so that we can play some political games.
On the prospect of spending cuts
A Martinez: Will you cut spending as a result of there's just this threat – or if it happens?
Zach Conine: Well, at some point, if we start seeing decreases in revenue, we'll have to cut spending. But right now, Nevada is dealing with a very, very good economic situation coming out of the pandemic... And it's one thing to deal with a global pandemic and to make the hard decisions that Nevadans had to make during that. But to deal with a manufactured crisis is frankly just a little disturbing to us.
On readying for a potential default
A Martinez: What, if anything, is the state preparing for – just in case? I mean, is it even possible to prepare, considering the uncertainty?
Zach Conine: It is. And we start thinking about things like having more cash in the bank when there has been – when there have been shutdowns in the federal government before. Sometimes the state has to lay out money in order to make sure that we're ready to pay whatever those bills are that typically would be paid for by the federal government. Our concern this time is we just don't know that we can count on them to pay their bills when they come due to the state.
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