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Cuomo: Fed default could cost NY $2 billion

Gov. Andrew Cuomo in Long Beach. Cuomo said

Gov. Andrew Cuomo in Long Beach. Cuomo said Wednesday that a federal government default could cost New York as much as $2 billion. (Nov. 10, 2012) Photo Credit: Howard Schnapp

Gov. Andrew M. Cuomo said Wednesday that a federal government default could cost New York as much as $2 billion.

With the federal government shutdown in its ninth day Wednesday, President Barack Obama and congressional Republicans still aren’t close to resolving the gridlock and taking action on the nation’s debt limit. Obama and others have said that defaulting on the federal debt will cause turmoil in the markets, if not a recession.

While not mentioning Democrats or Republicans, Cuomo bashed “congressional dysfunction” and said the standoff could have “dire consequences.”

“Jeopardizing our full faith and credit is a new level of recklessness and irresponsibility that would have dire consequences and could cause irreparable damage to our economy,” Cuomo said in a statement outlining the potential costs to the state. Cuomo said the $2 billion estimate was based on wage and capital-gains data from the 2009 recession.

As the home of Wall Street, New York would suffer disproportionately from default, Cuomo said.

“New York is the epicenter of the financial services industry, which is still recovering from one of the most cataclysmic periods in its history,” Cuomo said. “A default of federal debt would reverse the progress that has been made and impact Wall Street profitability, employee compensation and, as a result, state revenues.”
 

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