Abercrombie Makes Plans as National Debt Deadline Nears

By Wendy Osher

Governor Neil Abercrombie, file photo by Wendy Osher.

Governor Neil Abercrombie today announced plans for Hawai’i, as lawmakers continue to search for a resolution to the national debt crisis.

To ensure that the State of Hawai’i is prepared, Gov. Abercrombie convened members of his cabinet and the state’s financial leaders to devise a plan.  The objective, the Governor said, is to avoid interruptions to programs that rely heavily on federal funds.

“Together we are taking a sober look at the possibility of a federal default and the impact it could have on the State of Hawai’i,” said Governor Abercrombie.

State Budget Director Kalbert Young called the state plan a “cash conservation strategy” that would cover the federally-funded state programs for a short period of time. “We will have to wait to see which federal programs might see reduced funding, and by how much,” said Young.

Should temporary funding disruptions occur, Abercrombie said the state’s top bankers have pledged their support.  “We are ready to work with the state to ensure the continuance of a stable economy in Hawai’i,” said Gary Fujitani, Executive Director of the Hawai’i Bankers Association.  Fujitani said the state’s banking community has “substantial liquidity” that would enable temporary financial correction.

Congress has five days left to make a decision on how to avoid default, and address its financial obligations.  Proposals that have surfaced so far include suggestions to raise the nations debt ceiling, limiting discretionary spending, and putting a cap on federal spending.