Peter Barca on the US Debt Ceiling and Impacts on Wisconsin

>> REPORTING FROM BROAD HEAD, I AM ZACH SCHULTZ FOR "HERE & N NOW."

>> LAWMAKERS SCRAMBLING TO MAKE DOWN TO A WIRE DEER TO RAISE THE DEBT LIMIT.

WHAT WOULD A NEAR DEFAULT MEAN FOR WISCONSIN'S ECONOMY?

WE TURN TO WISCONSIN DEPARTMENT OF REVENUE SECRETARY PETER BARKA.

>> WHEN IT COMES TO A CLOSE OF THE U.S. GOVERNMENT GOING INTO DEFAULT, DOES REACHING THE EDGE DO ITS OWN KIND OF DAMAGE?

>> CERTAINLY DOES.

2011 LAST TIME THEY CAME UP TO EDGE OF DEFAULT, UNDER OBAMA ADMINISTRATION, AAA TO DOUBLE A PLUS NEVER ELEVATED AGAIN.

IF THEY DO THIS AGAIN VERY WELL COULD SEE ANOTHER DOWNGRADE, CATASTROPHIC IN MANY WAYS.

FIRST OF ALL, COST MORE FOR THE FEDERAL GOVERNMENT TO BORROW.

SECONDLY, MARKETS ALWAYS TIP.

MEANS FOR SENIORS, WHO ARE DEPENDING ON 401KS, THEY GET WORRIED AND TAKE A DIP.

BEING CLOSE IS BAD ENOUGH.

IF THEY DEFAULT, WE ARE TALKING ABOUT SIGNIFICANT PROBLEMS, 16,400 JOBS LOST IN WISCONSIN ACCORDING TO LOUISIANA ANALYTICS, DECLINE IN PAYROLL.

WITH HOLDING TAXES GO DOWN, CORPORATE TAXES GO DOWN.

IT WOULD HAVE AN EFFECT ON WISCONSIN AS WELL.

>> WHERE AND WHY ARE THOSE JOBS LOST?

>> WHAT ENDS UP HAPPENING WHEN THE MARKETS SUFFER, THAT IS THE FIRST STAGE.

INVESTMENT DOLLARS ALSO START TO DRY UP.

SO BUSINESSES THAT MAYBE WERE GOING TO EXPAND OR DEPENDENT ON HAVING EXTRA CAPITAL ALL THE SUDDEN HAVE TO LAY PEOPLE OFF.

THAT IS THE OTHER DEVASTATING THING.

EFFECT IS UNEVEN.

EFFECTS SENIOR CITIZENS DEPENDING ON INVESTMENT INCOME.

YOUNG PEOPLE FIRST ONES TO BE LAID OFF.

IT IS NOT EVEN IN EFFECT THOSE PEOPLE ARE MIDDLE INCOME YOU KNOW, EDGE OF SOCIETY.

THEY ALWAYS GET HURT THE WORST.

>> THEN THERE IS THE SPECIFIC VERY INSTANT EFFECT, RIGHT OF PEOPLE POTENTIALLY NOT GETTING SOCIAL SECURITY CHECKS?

>> OF COURSE.

THAT IS NOT EVEN LOOKING AT THAT.

IF IN FACT, THEY DO DEFAULT, THEN THE TREASURE SECRETARY HAS TO START TRIAGING AND MAKING DECISIONS IF YOU ARE GETTING SOCIAL SECURITY CHECKS OUT ON TIME.

WHETHER OR NOT PEOPLE ARE JUST ABOUT TO QUALIFY FOR MEDICAID OR MEDICARE.

OF COURSE LOTS TO HEAR ABOUT VETERANS AND THEIR BENEFITS.

IT IS AN INCREDIBLE RIPPLE EFFECT.

PART THAT IS SO SAD IT IS SO UNNECESSARY.

THREE TIMES IN THE TRUMP ADMINISTRATION THEY DID THIS.

I THINK OF IT AS A FAMILY.

WHEN OUR CREDIT CARD BILL IS DUE, I AM NOT GOING TO PAY SO I PAY INTEREST IN PENALTIES.

PAY YOUR BILLS WHEN THEY ARE DUE AND MAKE DECISIONS BUDGET PROCESS, APPROPRIATE SPENDING TAX RELIEF.

ABSOLUTELY NO REASON WHY THEY NEED TO DO THIS AT THIS JUNCTURE.

IT IS AT A VERY PERILOUS TIME.

FEDS INCREASING INTEREST RATES.

WE SAW FOR FISCAL BUREAU.

SLIGHT DIP IN TERMS OF SURPLUS.

YOU WORRY ABOUT TRAJECTORY.

>> SO MOODY'S SAYS IT IS NOT LIKELY IT IS GOING TO HAPPEN.

TREASURY SECRETARY JANET YELLEN SAYS HOLD ON PEOPLE, JUNE 1 IS THE DAY.

SHE IS SOUNDING THE ALARM ON THIS.

>> RIGHT.

>> WHAT DO YOU THINK?

>> KNOWING WE DON'T WANT TO GET UP AGAINST THAT LAST DAY OR TWO IN CASE IT TAKES LONGER TO GET THE VOTES OR GOES SOUR.

WE ARE PLAYING WITH FIRE.

PLAYING WITH PEOPLE'S LIVES, ECONOMY, AND EFFECT ON SO MANY FAMILIES, I JUST HOPE TO GOODNESS THEY ARE ABLE TO DO SOMETHING IN THE NEXT WEEK.

>> SPEAKING OF MCCARTHY AND HIS CAUCUS AND MEMBERS, IS IT WORSE NOW, THIS KIND OF UP TO THE BRINK?

>> I THINK IT IS BECAUSE YOU KNOW, IN THE PAST, WHETHER DEMOCRAT, REPUBLICAN SPEAK OR MAJORITY LEADER IN THE SENATE, GENERALLY SPEAKING, MEMBERS TRUSTED LEADERS AND VOTE ACCORDINGLY TO WHATEVER VOTE IS REACHED.

WHEN MCCARTHY AGREED TO BECOME PART OF THE -- HE HAS TO BE ALL THE MORE CAREFUL ABOUT WHAT DEAL HE STRIKES.

I AM SURE HE MUST HAVE TO BE ON THE PHONE CONTINUALLY.

>> HAVE WE SEEN ANY INDICATION YET BECAUSE WE ARE SO CLOSE TO THAT JUNE 1 DATE IN MARKETS OR ANYTHING LIKE THAT?

>> OUR ECONOMISTS WATCHING THIS CLOSELY.

WE ARE VERY NERVOUS OURSELVES.

WE DO NOT WANT TO SEE AT A TIME WHEN WISCONSIN HAS NOT BEEN STRONG.

WE DO HAVE AAA BOND RATING.

LOWER NUMBER OF PEOPLE