Financial services officials warned House Republicans during a meeting Thursday that a failure to raise the debt limit and avoid default could cause serious long-term harm to the economy.

Rep. Nan Hayworth (R-N.Y.) organized the meeting with financial services firm JPMorgan Chase & Co.; credit rating agency Standard & Poor’s; the Investment Company Institute, the national association of investment companies; and others for more than three dozen Republicans.

According to a source familiar with the meeting, financial services officials warned that if Congress does not raise the debt limit before the Aug. 2 deadline, there could be a “dramatic drop” in the value of the bond market, leading to an economic “death spiral” in which the markets drop at increasing rates.

But lawmakers sought to downplay the severity of the warning after the meeting.

Hayworth described it as an “informational session. … We had a dispassionate and objective discussion.”

Rep. Mike Pompeo said that the officials also called on Congress to drastically cut spending levels. “It was very clear to me … that if we kick the can down the road” on spending, credit rating agencies could downgrade the nation’s rating even if the debt limit is raised, the Kansas Republican said.

Nevertheless, Republicans in attendance seemed to strike a softer tone than the GOP has in the past 10 days, leaving room to negotiate on the party’s Cut, Cap and Balance proposal. For instance, Rep. Charles Boustany (La.) called the House-passed bill, which is expected to fail in a Senate vote Friday, “basically an outline. … It’s an outline that would take a lot of legislative work.”

Rep. Charlie Dent said Republicans should not lock themselves into a single position. “I think we have to remain flexible. The stakes are very high here,” the Pennsylvania Republican said, adding that Republicans should “not make statements about what we’d never do.”

Pompeo agreed, saying: “This isn’t about the headline. This is about what will happen over the long term.”

Meanwhile, a coalition of 50 Ohio tea party organizations called on Speaker John Boehner (R-Ohio) to reject any increase in the debt limit, insisting that the nation can meet its obligations without an increase.

“We are fully aware of the consequences of the debt ceiling not being raised, as we are also fully aware of measures that can be taken which will keep us from defaulting, will maintain vital services and will maintain payment to our military,” the organizations said in the letter.

The organizations added, “As the American public will be forced to pay the price of any debt ceiling increase, so too will the elected officials from Ohio ignoring the wishes of the Tea Party, 9.12 and liberty-minded groups from here, as will the elected officials from other states ignoring the wishes of well over half of this country.”

“Speaker Boehner must listen to all Americans, and certainly to those in his home state of Ohio,” said Tea Party Patriots national coordinator Jenny Beth Martin. “The Ohio freshmen who were elected by the tea party — giving Speaker Boehner his leadership position — must know that their constituents clearly reject any increase in the debt ceiling.”