Cleaver: On Consequences Of Doomsday Debt Scenario

Originally published on July 29, 2011 10:38 am
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MICHEL MARTIN, host: I'm Michel Martin and this is TELL ME MORE from NPR News.

Coming up, NPR senior business editor Marilyn Geewax is going to join us to give us some additional perspective on what the economists are saying about how a default on the nation's debt could affect all of us. And David Brody, chief political correspondent from the Christian Broadcasting Network, is also going to join us to give us perspective, particularly what conservative Christians have to say about all this.

But first, we're going to continue our conversation with Emanuel Cleaver. He's a Democrat. He's a congressman from Missouri. He's also the chair of the Congressional Black Caucus. Congressman Cleaver, thanks for staying with us. How do you think these negotiations and these discussions would affect your constituents, you know, broadly speaking, particularly African-Americans, particularly minorities?

Representative EMANUEL CLEAVER: It's going to be devastating to every American. The poorest, of course, are going to be hurt the worst, as always. But I had a conference call yesterday with my business leaders in Kansas City from all backgrounds. And with no exceptions they were saying, look, if there is no debt ceiling deal reached and we fail to pay our debts, the consequences will be catastrophic. And if you look at the fact that interest rates are going to go up on the United States and then those interest rates, of course, will force a rise in our personal interest rates.

And there's - I had the president of one of our universities on the phone, who said, look, you have to do a deal because the college education is going up already and my students are going to have to get loans and the interest on those loans could be far greater than what they can pay.

There is no segment of society that can escape. But you're going to - you need to understand that when you look at this situation, economically, around our country right now, the government has been the only entity putting money into the economic activity of the nation. So all of the money going into the government - let's assume it's pulled out or just some of it is pulled out, it will also generate a higher level of unemployment. And that unemployment will take place in the lower income ranks, which would mean African-Americans and Latinos.

MARTIN: Finally, before we let you go, one more story affecting your constituents that I wanted to ask you about. A recent report by the Pew Research Center states that the wealth gap between white households and black and Latino households is widening. The median household wealth for whites is 20 times that of black households. Virtually all the economic gains of the last decade have been wiped out for both African-Americans and Latinos. I'd like to ask why you think that is and is there anything you think that can be done to address that. As briefly as you can. And I apologize - it's such an important question.

CLEAVER: Sure. Sure. Look, first of all, most of us could see that coming because African-American and Latino wealth is generally in their homes. And since African-Americans and Latinos were targeted by the unscrupulous, you know, mortgage companies, they ended up becoming involved in these exotic mortgages and they've lost their homes or they're underwater. And that was about the only wealth that African-Americans had. And that's just been wiped out.

And keep in mind that when people celebrate the state governments laying off individuals or municipal governments or the federal government laying off individuals, African-Americans are disproportionately employed in these sectors because African-Americans flock to theirs believing that a lesser degree of bigotry and discrimination would be there. So...

MARTIN: I see. I see. And we've reported on that. In fact, I can refer to earlier conversations where we actually have some data on this point. Congressman Cleaver, I know you have to get back to these important discussions. We thank you for taking the time to speak to us. We'll check back with you. Emanuel Cleaver is the chair of the Congressional Black Caucus. He's a Democrat. He represents the 5th district of Missouri. And he was kind enough to join us from the House studios on Capitol Hill once again. Mr. Chairman, thank you for speaking with us.

CLEAVER: Good to be with you. Transcript provided by NPR, Copyright NPR.