What Does Debt Crisis Mean for the Chathams?

As the deadline for reaching a solution on the nation's debt crisis approaches, Chatham officials anticipate little effect to local governments.

The municipal budgets in Chatham Borough and Chatham Township, according to the borough's Chief Financial Officer Tammie Kopin and Township Administrator Tom Ciccarone, will remain untouched regardless of whether Congress reaches a decision on whether to raise the ceiling for the national debt.

"Some Triple A-rated government agencies could see a downgrade," Kopin said. "Moody's has indicated that our bond rating is not in jeopardy because we are not dependent on federal aid."

"We do not receive any direct aid from the federal government," Ciccarone wrote via email. "There are at times grants that pass through the state to us," and "municipalities are making 100% of their obligatory contributions (after a period of time when the state granted a pension holiday and called it state aid)."

Kopin said that regardless of whether Congress reaches a solution by the Aug. 2 deadline, "there will be no cash flow problems in the borough."

If Congress does not reach an agreement on how to raise the national debt limit by Tuesday, the nation runs the risk of defaulting on bills. This could result in Social Security checks being withheld, interest rates on credit cards and mortgage loans increasing and the US dollar losing value.

The debt ceiling was raised 18 times under President Ronald Reagan and seven times under President George W. Bush.