Millions of Americans could be unable to pay their bills if the United States fails to meet its financial obligations.
With Social Security and other government benefits at stake amid the political deadlock over the government’s debt ceiling, experts and older Americans told ABC News that the impact of the deadlock in Washington would be said the consequences could be disastrous, including for older Americans who need money to pay for basic necessities. Needs such as food, housing, and medical expenses.
A quarter of Americans over the age of 65 depend on Social Security for at least 90% of their household income, according to the United States. Social Security Administration.
Fred Garner, 86, a New Yorker, told ABC News that he uses Social Security for his $800 rent. But now there is a real risk that his payment may not be made in time for June — the Treasury Department says the government may not be able to send him the money it was expecting.
Garner said of how the issue has been politicized, “it’s very stressful and you’re going to have a heart attack.”
How will Social Security payments be affected by the debt ceiling?
Since 2001, the United States as a whole has spent more money than it has received.
To fill the gap, the U.S. Treasury is issuing bonds through securities, according to Olivia Mitchell, a professor at the Wharton School of Management at the University of Pennsylvania. These securities are backed by the United States and are welcomed by investors who see them as safe guarantees that will be repaid with interest.
But Mitchell pointed out that only two countries, the United States and Denmark, limit the amount of debt a government can issue, known as the debt ceiling.
Lawmakers can pass new laws mandating government spending, but the debt ceiling will remain in place until lawmakers vote to raise it. Since 1960, this has happened 78 times in the United States.
Treasury Secretary Janet Yellen has warned House Speaker Kevin McCarthy that the country will be unable to meet all of its fiscal obligations if the debt ceiling is not raised by June 1.
Not only will it be unable to pay interest and principal on government securities, according to the paper, which economists largely agree could disrupt the stock market and damage U.S. credit ratings. , the Treasury will also be unable to issue new government bonds to finance social security and other expenditures. Mitchell.
the government plans to spend roughly $100 billion An announcement on Social Security was made in June, according to the Bipartisan Policy Center.
“Unless Congress and the President can come together on this issue, it’s going to be very difficult for the public for a while,” Mitchell said.
When are Social Security payments late?
The Social Security Administration plans to remit donations to beneficiaries. four dates Next month is June 2nd, 14th, 21st and 28th. These checks will be the first to be at risk of delay, according to Max Lichtmann, chairman and CEO of the National Board of Sustaining Social Security and Medicare.
“Millions of Social Security recipients worry about whether they have the income to pay their basic bills,” he said.
Linda Fisher, 80, told ABC News that her budget relies on monthly Social Security checks, delays that complicate essential spending, and that she has devoted her life to Social Security. The 19-year-old said she was frustrated.
“I paid Social Security, I paid Medicare,” she said. “And now they’re trying to take it away. It’s not their money, it’s my money I paid for.”
Lichtmann is now worried that negotiations will not reach a compromise in time to avoid defaults, and he is actively encouraging older residents to save in anticipation of delays in Social Security payments. there is
Yellen suggested on NBC’s “Meet the Press” on Sunday that certain bills could take precedence, including interest payments, Social Security and military contractor payments. Lichtmann, however, expressed doubts as to whether such prioritization is legally possible.
What does this mean for the future of Social Security?
Some Republican lawmakers have argued that a debt ceiling struggle is necessary to curb government spending. But some economists, including Mitchell, see it as a “manufactured crisis” that threatens essential services, retirement savings and the economy as a whole.
“Each crisis like this tells investors around the world and in the United States that Treasuries are not as safe as we think they are,” said Lawrence Kotlikoff, an economics professor at Boston University. rice field.
Mr. Kotlikov expressed further concern that the social security system would indefinitely carry over $65.9 trillion in outstanding financial debt based on its own criteria. report.
However, according to Kotlikoff, Mitchell and Lichtmann, the debate over the debt ceiling is unlikely to produce a meaningful solution to the widespread social security shortfall.
When will retirees receive their benefits?
Mitchell and Lichtmann remained optimistic that, despite some delays, Social Security beneficiaries would eventually receive checks if an agreement were reached.
“We are very confident that the payments will be honored,” Lichtmann said. “This is not very consoling for people who cannot pay their groceries, utilities or rent while they are awaiting repayment.”
The Social Security Administration plans to remit donations to beneficiaries. four dates Next month is June 2nd, 14th, 21st and 28th. These checks will be the first to be at risk of delay, according to Max Lichtmann, chairman and CEO of the National Board of Sustaining Social Security and Medicare.
“Millions of Social Security recipients worry about whether they have the income to pay their basic bills,” he said.
Linda Fisher, 80, told ABC News that her budget relies on monthly Social Security checks, delays that complicate essential spending, and that she has devoted her life to Social Security. The 19-year-old said she was frustrated.
“I paid Social Security, I paid Medicare,” she said. “And now they’re trying to take it away. It’s not their money, it’s my money I paid for.”
Lichtmann is now worried that negotiations will not reach a compromise in time to avoid defaults, and he is actively encouraging older residents to save in anticipation of delays in Social Security payments. there is
Yellen suggested on NBC’s “Meet the Press” on Sunday that certain bills could take precedence, including interest payments, Social Security and military contractor payments. Lichtmann, however, expressed doubts as to whether such prioritization is legally possible.
What does this mean for the future of Social Security?
Some Republican lawmakers have argued that a debt ceiling struggle is necessary to curb government spending. But some economists, including Mitchell, see it as a “manufactured crisis” that threatens essential services, retirement savings and the economy as a whole.
“Each crisis like this tells investors around the world and in the United States that Treasuries are not as safe as we think they are,” said Lawrence Kotlikoff, an economics professor at Boston University. rice field.
Mr. Kotlikov expressed further concern that the social security system would indefinitely carry over $65.9 trillion in outstanding financial debt based on its own criteria. report.
However, according to Kotlikoff, Mitchell and Lichtmann, the debate over the debt ceiling is unlikely to produce a meaningful solution to the widespread social security shortfall.
When will retirees receive their benefits?
Mitchell and Lichtmann remained optimistic that, despite some delays, Social Security beneficiaries would eventually receive checks if an agreement were reached.
“We are very confident that the payments will be honored,” Lichtmann said. “This is not very consoling for people who cannot pay their groceries, utilities or rent while they are awaiting repayment.”
