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SLEEPY HOLLOW, N.Y. Village Administrator Anthony Giaccio said he doesnt think the federal governments potential default would significantly impact the village government.
Besides the Community Development Block Program and smaller grants, Sleepy Hollow doesnt receive much federal funding, Giaccio said. The Community Development Block Program provides the most federal funding for the village.
The Village has received millions of dollars from this program over the years, Giaccio said. We found out this week that this program may be cut. However, this does not have to do with the government default. It has to do with a housing dispute.
If the federal government defaults, Giaccio said he thought it would affect individuals that receive benefits more, not the village government as a whole.
If, in fact, Democrats and Republicans cannot end their bitter stand-off before Tuesday's deadline, local representatives fear the worst but have assured their constituents that Social Security and Medicare will be taken care of.
"The treasury will still be able to pay our sovereign debt obligations," said Congresswoman Nan Hayworth (R -- Mount Kisco) of New York's 19th District.
Hayworth said the local governments and organizations in Westchester County will be most likely to feel the pinch with things 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, not grants.
"Some might have to give an IOU to their local contractors if they're willing to take one," she said.
Congresswoman Nita Lowey (D - Harrison) of New York's 18th District said failure to raise the debt ceiling could result in higher interest rates that could impact the cost of mortgages and credit card payments.
"Families could lose thousands of dollars from retirement savings and investments," she said. "It is clear that Congress and the President must agree to a plan that ends the default crisis and includes responsible spending reductions that do not balance the budget on the backs of the most vulnerable Americans."
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."
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