Former GOP senator says now is no time for the US to create global instability

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This story is based on a radio interview. Listen to the full interview.

Audio Transcript:

Marco Werman: I'm Marco Werman. This is "The World". It's getting a little too close for comfort now. I'm taking about the debt ceiling debate. Our politicians now have less than two days to figure things out or America will be staring default in the face come Thursday. Think about it, the US failing to pay its debts for the first time in history. Later in the program we'll hear about what that will look like to future students of US history.

Geoffrey Parker: Looking at the outside world, it is just incredulity that the greatest power in the world cannot get its act together. And I think one year, ten years, a hundred years from now, that will still be something which is very hard to understand.

Werman: But we begin our coverage by focusing on the potential global ramifications now. Richard Lugar was a Republican senator from Indiana for thirty-six years and a foreign policy leader on Capitol Hill for much of that time.

Richard Lugar: I'm afraid that many of my former colleagues are not taking on the world view. This has been much more a debate about domestic issues principally and house representative on so-called Obamacare, the affordable health act that Congress passed last year. In addition there are, especially in the house, Republican members who believe the debt ceiling is not that much of a crisis, that it would form a discipline for the United States to cut spending much more drastically. My view is that these members really do not have an overall sense really of either the foreign policy issues or the domestic ones when it comes to banking. But nevertheless, they are a strong [??] and they threaten other members with primary elections in their states if they do not go along with this process.

Werman: There are people, we've had them on the program just yesterday, in Europe saying they can't believe this is happening in the US. So when you speak to those colleagues in other countries, how do you answer the question "How can a handful of Tea Party activists take not just a country, but kind of the world economy hostage right now?"?

Lugar: Well, I try to explain to colleagues abroad what our political situation is. I think there are many in the United States who believe that our debt presently is too high, that budgets that have been adopted in the past have not been close to being balanced, and that, as a result, we are increasing that debt and that trend has to be stopped. I think most of us agree with those general principles. The problem is in the [??] working day by day. In other words, if we come to a point where the treasury really is not able to borrow any more money, then there will be very sharp political ramifications in the United States and that is likely to bring about Congressional action in a hurry. Perhaps no one believes that that's going to happen and I hope that they are right in that respect, but it certainly brings about a great deal of nervousness here and abroad.

Werman: So how do you think not just a shutdown, but a possible fiscal default are damaging US interests around the world right now?

Lugar: Well, default clearly would be very damaging and, in my own judgement, this is not going to occur.

Werman: I mean whether the US is fiscally responsible or not I guess is up for debate, but it seems like it's the reliability of the dollar that a lot of countries around the world see as the main kind of stability of the US. Is this moment though, do you think, a sea-change of the US reputation economically around the world?

Lugar: No, I don't believe it is a sea-change. I believe, as I say, that we will not default as a country on our obligations and as a matter of fact that the dollar will still remain as the standard for most currencies. But there currently is an anxiety, understandably, in the world where many countries, in Europe in particular, have been working in a very public way to try to bring the stability in southern European countries, as well as perhaps the European Union as a whole. There are problem I will swear in Latin America that are very severe that don't receive quite the same attention. This is gonna be a difficult period for the world in which huge adjustments are being made and for the United States to offer further anxiety is simply too much for many people around the world to encompass. They count upon the United States for stability. I think they should.

Werman: Former senator Richard Lugar now running the Lugar Center in Washington.