By IL Public Radio
Chicago, IL – As officials in Washington continue their showdown over the national debt ceiling, Illinois leaders are preparing for the possibility an agreement won't be reached.
Governor Pat Quinn has called the possibility of the federal government defaulting on debts "cataclysmic."
Illinois is dependent on federal grants and reimbursements, and those could be jeopardized.
There's also the matter of the state treasury. Treasurer Dan Rutherford says he's meeting with his investment teams to determine how to best react to a national default.
The Republican says he'd have to move about 3 and a half billion dollars of the state's investment portfolio into accounts that he expects would yield no interest.
"That's not good, but ... but again my responsibility is to safeguard the state treasury. I will move several billions of dollars ... but they will be secured, they will be insured, and they will be safe."
Any repercussions on the federal bond rating could also trickle down to the state level. Meaning, it'd cost Illinois more to take on debt.
The Treasurer says that buttresses his position that Illinois should not take out a loan.
The Governor and other Democrats want to borrow upfront so the state can hurry to pay down billions of overdue bills.
They say refinancing would be wise, and save money in the long-term.
