Debt crisis: Abercrombie convenes cabinet for worst case scenario

HONOLULU—Gov. Neil Abercrombie convened members of his cabinet and the State’s financial leaders to prepare for various scenarios, should a resolution to the national debt crisis not be found on Capitol Hill with days left to raise the debt ceiling.

“Together we are taking a sober look at the possibility of a federal default and the impact it could have on the State of Hawaii,” Abercrombie said. “We have a sound plan and are prepared to keep our economy stable. We are carefully managing the State’s finances and our local banks are ready to step forward if the need arises.” 

House and Senate leadership were informed of the Administration’s plan, officials said in a statement. Abercrombie’s objectives are to avoid interruptions to programs that depend heavily on federal funding.

Budget and Finance Director Kalbert Young said: “We have a cash conservation strategy with the intent to cover 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.”

The State’s top bankers have pledged their support to if the state finds temporary funding disruptions.

Hawaii Bankers Association Executive Director Gary Fujitani said: “Our banking community has substantial liquidity that is ample to weather any temporary financial correction. We are ready to work with the State to ensure the continuance of a stable economy in Hawaii.”

Abercrombie added: “These past few days we have witnessed heightened political wrangling and rhetoric in Washington, D.C. that is causing many to lose faith in government. Here in Hawaii, we know that government exists to serve the people and we understand that any challenge can be overcome when we all work together.”