GOVERNOR ABERCROMBIE PLANS FOR POSSIBILITY OF NATIONAL DEFAULT

Financial Leaders and the Abercrombie Administration Come up with Strategy

News Release from www.Hawaii.gov/gov

Honolulu – With no signs of a resolution to the national debt crisis, Governor Neil Abercrombie has taken steps to ensure that the State of Hawai'i is prepared.

Knowing that Congress has five days left to raise the debt ceiling and given the uncertainties if a solution is not found, Governor Abercrombie convened members of his cabinet and the state’s financial leaders to prepare for various scenarios.

“Together we are taking a sober look at the possibility of a federal default and the impact it could have on the State of Hawai'i,” said Governor Abercrombie. “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 are informed of the Administration’s plan. The Governor’s objectives are to avoid interruptions to programs that depend heavily on federal funding.

Budget and Finance Director Kalbert Young noted, “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 the Governor if the state finds temporary funding disruptions.

Hawai'i 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 Hawai'i.”

Governor 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 Hawai'i, we know that government exists to serve the people and we understand that any challenge can be overcome when we all work together."

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