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Debt Ceiling Issue Could Affect Pelham Governments

PELHAM, N.Y. – The ongoing standoff between Democrats and Republicans in Washington, D.C. over the debt ceiling could affect local governments including Pelham and Pelham Manor. But village officials remain optimistic that the situation will not affect the area too negatively.

The federal government has until Tuesday to vote to raise the debt ceiling. Pelham Manor's positive financial situation could soften the blow to the village if the government  does not resolve the issue before that deadline.

"We don't have debt," said Maryalice Barnett, deputy village clerk for the Village of Pelham Manor. "We don't really have a lot of federal funds."

Barnett said Pelham Manor receives money from FEMA.

The debt ceiling issue could more seriously affect the Village of Pelham. Village administrator Robert Yamuder said that the village has some federally funded projects coming down the pipe.

"We remain hopeful that federal grant stream will not be affected," Yamuder said.

It has been widely reported that if Tuesday's deadline is not met the government will default. However, officials say that is technically not true. Default happens when interest on loans is not paid but officials say the government has enough money from tax revenue to cover those payments.

"I agree that the definition of 'default' is more technically detailed than used in common parlance," said Congresswoman Nan Hayworth (R – Mount Kisco) of New York's 19th district. "The treasury will still be able to pay our sovereign debt obligations."

Hayworth said those include treasury bonds, Social Security and Medicare. She also said that while everyone is focused on the Tuesday deadline, "knowledgeable observers" say it could take until past Aug. 2 for governments to feel the effects of the failure to raise the debt ceiling.

But if those days pass without any resolution, Hayworth said local governments and organizations in Westchester would most likely feel the pinch in areas such as Community Development Block Grants. She said the treasury department would have to prioritize its payments and items such as Social Security, Medicaid and military paychecks would likely be at the top of the list.

New York State Senator Greg Ball (R, C – Patterson) said the fallout would be especially trying for the state because he feels New York does not rebound quickly from fiscal crisis.

"Historically, New York State takes twice as long to recover from an economic downturn," he said. "So, any recovery caused by this would be doubly hard. It would go beyond lost grant money. It would cause a problem balancing the state budget. It's odd that Washington is making Albany look good right now. But all I can say is this would be devastating at both the state and local level."

What do you think about the debt ceiling issue? How do you think it will affect Pelham? Comment below, on Facebook or Twitter @DailyPelham .

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