Here’s how it could affect Social Security checks
WASHINGTON–Like dueling pianos, President Joe Biden and House Speaker Kevin McCarthy stood simultaneously in front of microphones Tuesday night – with one in the White House and the other in the Capitol – to blame each other and their opposing political parties for why the country could run out of money to pay the bills for the first time in US history.
While they were doing the sting, the health and financial security of millions of Americans across the country were at risk. While getting Republicans and Democrats to agree on financial aid is never an easy task, the knock-on effect of the conflict is clear: U.S. citizens who rely on government payments for wages, pensions, food assistance, medical care and more will lose these benefits. if the nation does not have money to cover its obligations.
The press conferences on Tuesday did not solve that problem. They did little more than prove that Biden, McCarthy and other top congressional leaders made little progress during their Oval Office meeting that afternoon. McCarthy said there was no movement towards a resolution and the only real sign of progress was that they met for the first time in 97 days.
They met to speed up negotiations and save the nation from defaulting on its obligations — something that has never happened in America but could happen this year as soon as June 1[ads1], according to Treasury Secretary Janet Yellen.
The meeting:Biden, McCarthy fail to reach deal on debt ceiling in Oval Office meeting as default looms
Social security payments at risk in July
If the country’s top leaders do not agree to raise the nation’s borrowing limit and her predictions come true, it will have catastrophic and devastating effects across the country, Yellen, the Treasury Secretary before her and several economists agree.
One of the biggest consequences will be for social security. The program, which millions of Americans rely on for money in retirement, is often viewed by politicians as the untouchable vanguard of government assistance, but it has been the subject of heated debate between Republicans and Democrats in the 118th Congress. If the debt ceiling is not raised by the projected default date in June, Social Security benefits in July will be at risk.
With three weeks until June 1 – with both houses of Congress in session for just 10 days – Yellen has emphasized the “economic disaster” that could result without an increase in the debt limit.
“Whether it’s defaulting on interest payments due on the debt or payments due for Social Security recipients or to Medicare providers, we simply wouldn’t have enough cash to meet all of our obligations,” she said Sunday on ABC’s ” This Week.” “And there is broad agreement that financial and economic chaos will ensue.”
What you should know:Are you planning your retirement? 3 tough truths about social security to consider.
Are social security benefits really at risk in case of default?
Some economists have said that at most Social Security payments could be delayed or disrupted, and some have said they won’t be affected at all.
Despite some talk on Capitol Hill that the government could or would somehow prioritize payments in a standard so that seniors and veterans are taken care of, Yellen has said there is no plan to do so.
Also, because the government has never defaulted on its obligations, there is no clear road map for what will happen, and US systems have not been operationally tested in a scenario like this.
During a March 22 Senate appropriations hearing, Yellen said her job as Treasury secretary is to make sure all the bills are paid, not to decide which bills are more important than others.
“Prioritization is standard by another name,” she said. “Not paying any of our bills is standard. When you think about the pain it would cause to Social Security recipients, to food stamp recipients, to providers who have provided services, to the government who have their own payrolls to meet, to be told that they’re not going to get paid, the government isn’t going to honor those bills. That’s a default.”
The government pays millions of bills a day and the payment systems are set up to pay all the government’s bills when they fall due. “They are not set up to divide payments into different types as a general matter,” Yellen said.
“For many agencies, payments of all different types are mixed together in ways that could not be disentangled,” she added.
Poll:As Social Security and Medicare face shortfalls, most Americans oppose cutting their benefits
When will Biden and McCarthy meet again on the debt ceiling?
Top congressional aides will continue to meet with White House officials throughout the week, and Biden and McCarthy are due to meet again on Friday.
Republicans refuse to raise the debt ceiling without federal spending cuts in exchange. Democrats say the nation’s borrowing limit should be raised without conditions and federal spending negotiations should be held separately.
Meanwhile, Democratic lawmakers representing states with the most Social Security recipients, such as McCarthy’s home state of California, are raising concerns and blasting the House GOP bill that passed April 26 that would raise the debt ceiling while cutting trillions in federal spending.
What the Democrats are telling USA TODAY
About 66 million Americans receive Social Security benefits, federal data show. Payments are made not only to people of retirement age, but also to millions of children and others with severe disabilities.
McCarthy’s home state of California has the most Social Security recipients in the country, with more than 6 million residents receiving the benefit, according to federal data. It is also the state with the highest population. More than 15 million people there receive Medicaid and about 4.5 million receive Medicare — the most of any state.
Rep. Rep. Ro Khanna, D-Calif., told USA TODAY that Republicans are using a potential default as leverage to try to force cuts “their members would never actually vote for as stand-alone bills because of the public backlash they would face.”
Cuts to critical programs like food assistance, Medicaid and more “would be devastating to people in my district and across the country who depend on these programs to get by,” he said. “We have to pay our bills first and then we can rationally discuss deficit reduction.”
Impact:‘I don’t have anything in my fridge’: GOP debt ceiling plan will slash SNAP benefits
Nearly 3 million Pennsylvanians receive Social Security benefits. Nearly 3 million are on Medicare, and nearly 4 million are on Medicaid, according to federal data.
“If the debt ceiling is not raised in time, Social Security and Medicare payments will be delayed. Veterans benefits will also be affected. The MAGA Republicans are putting the livelihoods of seniors and veterans at risk with their antics,” Rep. Brendan Boyle. D-Pa., told USA TODAY. He is the top Democrat on the House Budget Committee.
Another Pennsylvania Democrat, Sen. Bob Casey, told USA TODAY in a statement: “Make no mistake: House Republicans are trying to take away health care for the elderly, children and people with disabilities. Avoiding defaults cannot and will not go on expense to rip health care away from millions of Pennsylvanians. I will fight to protect Medicaid in any way I have to.”
In Illinois, more than 2 million people receive Social Security. More than 3 million receive Medicaid, and more than 2 million receive Medicare.
Senate Majority Whip Dick Durbin, D-Ill., described during the floor how a GOP debt plan would also affect other programs in Illinois: “The Republican proposal would force 13,000 children in our state to lose child care and preschool. It would remove food aid from 55,000 women, infants and children. Does that make any sense at all? And it would threaten medical care for more than 186,000 veterans in Illinois. Fifty thousand seniors would lose their Meals on Wheels in my state.”
What the Republicans are telling USA TODAY
McCarthy said Tuesday that it was “a lie” that the GOP proposal would cut veterans’ care, and he and other Republicans have recently blamed Biden and Democrats for any risk to Social Security. He maintained Tuesday that House Republicans “are the only ones in Washington who have passed a responsible debt limit increase that avoids default.”
That sentiment was echoed by other Republicans on the Hill this past week.
“The Biden administration may want to look in the mirror and realize that it is those who threaten a standard that would jeopardize these programs. Biden has the House Republicans’ solution in front of him — the only bill that takes a standard off the table and protects Social Security — but he’d rather bankrupt our nation than negotiate,” House Majority Whip Tom Emmer’s office told USA TODAY.
Rep. Dusty Johnson, RS.D., told USA TODAY in a statement: “President Biden has avoided negotiations on the debt ceiling for more than 90 days — his delaying tactics have put our seniors in direct harm. Republicans worked diligently to pass a plan that addresses our spending crisis and the debt ceiling, the president must take our plan seriously.”
Some Republican senators say they want to see more negotiations.
“I hope the president negotiates. He sold himself to the American people as a negotiator. So, what is negotiation? You have to give and take,” Sen. Shelley Moore Capito, RW.Va., told USA TODAY before Biden met with congressional leaders.
Capito said she hoped the meeting with the president would be more than a photo opportunity. “It’s better to be substantive,” she said. “He better come back with items that he thinks he could live with and that the house would pass.”
Sen. Mitt Romney, R-Utah, said he hoped for a compromise.
“We certainly want to raise the debt ceiling. At the same time, we would like to deal with the excessive spending and the debt burden that the country is facing, so let’s get them both dealt with,” he said.
A deeper look:Joe Biden puts Republicans in a corner on Social Security, Medicare with an eye on 2024
