Obama Needs to Take Lead on Debt Ceiling: Gregg

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Oct. 3 (Bloomberg) -- Former Senator Judd Gregg, a New Hampshire Republican, comments on the U.S. government shutdown and the possibility of a U.S. default. He speaks on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Senator of new hampshire judd gregg and a ceo.

Congress has a lot of work ahead of them.

There's no question about that.

You have the continuing resolution, which should have been passed by now, and the government is shut down, but it is going right into the debt ceiling.

The debt ceiling is a huge issue.

You can deal with the continuing resolution the way we are dealing with it.

It is not very constructive, but this is what happens when two sides reach an impasse.

Should we default, that would be dramatic and very difficult not only for the american economy, but the global economy.

The rest of the world depends on our debt.

If we do not a our debt back, the world will cause us to pay higher fees to borrow that money and it adds immediately to the bottom line of the cost of running government to increase interest.

More importantly it calls into question the basic orderliness of our system.

In fact, the treasury department released a statement recently saying even the possibility -- we are not talking a national default here -- but even the possibility would have effects on household.

The u.s. economy could plunge into a recession worse than any since the great depression.

Do you agree with that?

Well, i think that may be a little over-the-top.

But there is no question this would definitely impact economic growth.

Taxpayers would have to pay more, because we would end up with higher interest costs and when we are borrowing a lot of money -- $17 trillion these days -- and you get 100 basis points of $17 trillion, you are talking big bucks.

You are talking serious numbers here.

But more importantly, you are talking with respect to the american system and the fact that we are the people the world turns to when they have problems, when they want to be in a stable place in the world.

They come to the united states and the use treasury notes to do that.

It would be a huge mistake if we got too close to default or there was a default.

Which leads to the real issue, which is when do the two sides sit down and seriously negotiate this?

Unfortunately they had a meeting wednesday night at the white house that did not go very well.

But they cannot quit.

The president has to all everybody again in my opinion and push for an agreement.

Why the president?

Because it is the president's job.

The president and his the leader of the country.

Things do not happen without residential leadership.

You cannot leave it to members of congress to straighten something out.

You have 235 voices up there, some of which are not very responsible.

Nothing would happen.

You have so many things going on all at once.

You have the government shutdown.

Trying to pass a budget.

That is not easy.

You have the debt ceiling happening.

What if you were to throw them all together?

Let me share with you an excerpt or might interview with the former ceo of ge, jack welch.

I would like to hear your thoughts.

I would like to throw the sequester written, the crn, and -- the cr in and the debt ceiling.

In some ways, might this shutdown be a good thing because it forces everyone to the table to deal with the bigger issue at hand?

Can they put it all together?

I think so.

I think jack is absolutely right.

What you need is a mini-grand bargain that deals with the debt ceiling, and the cr, and the sequester.

It should deal with simpson- bowles, what we call simpson- bowles ii, and it should deal with significant entitlement reform.

If you can set that up -- and

This text has been automatically generated. It may not be 100% accurate.

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