SALT LAKE CITY — The U.S. is drawing closer each day to hitting its head on the debt ceiling, but Utah's congressional delegation is cautiously optimistic that a solution will emerge before the Thursday deadline.
Party leaders in the Senate are in negotiations, but so far no clear plan has emerged, Sen. Mike Lee, R-Utah, said Monday.
"There are a thousand rumors circulating, and it's really difficult to know at this point which of them might be true," he said.
Lee said he doesn't believe the country will end up in default, a situation he said is prohibited by the Constitution.
However, if no solution is reached, Lee said he will support legislation instructing President Barack Obama to direct revenue as it comes in toward paying off the nation's debts as they come due.
Natalie Gochnour, an associate dean in the David Eccles School of Business at the University of Utah, called a default "unimaginable" and said the effects would be felt worldwide.
"The security of our debt and our instruments of debt are vital to countries all around the world. They look to us for stability," Gochnour said. "When our debt instruments are close to default, then all chaos breaks loose."
If the debt ceiling is breached, the U.S. would be left with roughly $30 billion to pay its bills. The full impact would be felt before Nov. 1, when $67 billion is due for Social Security payments, medicare providers and military personal for salaries and benefits.
Here in the U.S., Gochnour worries interest rates would rise because of a higher perceived risk from lenders and investors. Auto, home and business loans would be more expensive. It could be harder to get credit, and a second recession could be on the horizon, she said.
Rep. Jim Matheson, D-Utah, said it's difficult to imagine just how bad a default could be for the nation's economy and how far the ripple would reach. He said he hopes a "reasonable group of bipartisan members of Congress" will come together this week to avoid a default.
Matheson said rumors are circulating in Washington, D.C., about both the approaching debt ceiling and possible solutions to the ongoing government shutdown.
"I hope people can come to their senses and we can resolve both these issues," he said. "I think we're going down that path this week, from what the reports are now. There's been a lot of brinksmanship, as is common in politics, but at the end of the day, I'm hopeful people will come together in a constructive way."
Rep. Jason Chaffetz, R-Utah, said he hopes the impending deadline will spur lawmakers into action, calling for the White House and Senate to talk to the House.
"Everybody recognizes that going past (the Thursday deadline) is not good for the economy," Chaffetz said. "There's no reason we should be flirting with danger. Let's solve this now and get on with it."