In a couple of days, the Treasury Department will hit the congressionally set limit on the country’s total borrowing. If Congress does not increase the debt ceiling or suspend it, the White House warned it would affect millions of Americans.
White House Warns Non-Payment Of Benefits
According to Forbes, the White House said that if there are no changes to the debt ceiling, it could quickly hinder the government’s ability to pay out the federal benefits. Millions of Americans rely on these benefits, and the derailing of the payout can happen as quickly as overnight.
The benefits at risk are Social Security, Medicare, veterans’ programs, Child Tax Credit, and housing assistance.
The Deadline To Raise, Suspend Debt Ceiling
The deadline to raise or suspend the debt ceiling is October 18. Suppose Congress fails to let the federal government borrow more money, there could be adverse effects aside from the Treasury not being able to carry out its basic function of providing financial assistance to those eligible.
White House economists, led by Cecilia Rouse, released a note saying that it could take decades to recover once the debt ceiling is not raised or suspended by October 18. Rouse added that around 56 million would not receive their payment on time or at all for Social Security beneficiaries alone. For Medicare, Medicaid, and Children’s Health Insurance program, close to 100 million people might lose coverage.
Forbes further noted that Treasury officials said they would be forced to prioritize certain payments before others, which they said had no fair or sensible solution. Once the Treasury runs out of cash, it will only meet 60 percent of its payment obligations by using tax revenues.
Forbes also quoted the White House economists saying, “Everyone in America would feel the effects of a default. If the United States were to default, tens of millions—including families with children, retirees, and veterans—would quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet.”
Lawmakers Are At An Impasse
Republican and Democratic lawmakers could not reach a compromise regarding this matter. Senate Majority Leader Chuck Schumer of New York, a Democrat, will most likely hold a vote for a House-passed measure to suspend the debt limit until December. Republicans, however, vowed to block it.
