Top intel Democrat warns China and Russia could ‘exploit’ US debt default

Rep. Jim Himes (D-Conn.), the top Democrat on the House Intelligence Committee, warned on Sunday that China and Russia could “exploit” a possible U.S. default, which the Treasury Department warns could hit as soon as next month.

“Of course, the Russians and the Chinese would seek to exploit it,” Himes said of the debt crisis on CNN’s “State of the Union.”

“You know, the United States has never really come close to defaulting on its debt before, so it’s hard for us to imagine what that might look like. But of course, it could be catastrophic. Frankly, the full faith and credit of the United States is the bedrock on which the global financial system is built,” the lawmaker added.

Himes warned that “all kinds of things could happen” if that comes into question.

“The U.S. dollar could – its position as the global reserve currency could be eroded. People may choose to invest in the United Kingdom or in the European Union rather than the United States,” he caution, stressing that “there had better be a solution” in the coming weeks. 

The Treasury has sounded alarms that it could run out of ways to stave off default by June 1, and lawmakers and the White House have been battling over how to address the threat. Republicans have pushed for spending cuts along with a debt limit increase, while the White House has pushed for a “clean” hike without such an agreement.

A default, if it does occur, could be a hit to the banking system, borrowing costs and federal entitlement programs, causing or exacerbating a number of economic woes.