Thursday’s breaching of the debt ceiling by the U.S. government is making seniors’ advocates very nervous. The federal government is now on track to default on its financial obligations (including the ability to make Social Security and Medicare payments) as early as June — unless Congress lifts the debt ceiling, which House Republicans refuse to do without spending cuts. NCPSSM legislative director Dan Adcock told CNBC that the country is heading for a fiscal “train wreck” if the GOP maintains its hardline position.
Raising the debt ceiling is supposed to be a routine matter of business so that the government can meet its existing financial obligations. In fact, Congress has raised the debt ceiling 78 times since 1960. If the debt ceiling is not adjusted before the Treasury Dept. exhausts “extraordinary measures” to pay the federal government’s bills, the U.S. will default on its debts, which would induce severe economic turmoil. Nonetheless, House Republicans are refusing to raise the debt ceiling unless Democrats agree to cut crucial programs. As CNN’s Jake Tapper put it, “Republicans are vowing to cut future spending before agreeing to pay bills that are already due.”
NCPSSM’s President and CEO, Max Richtman, warns that a federal default would not only invite economic catastrophe, but could negatively impact older Americans:
“Congressional Republicans are playing with fire by risking a government default on its financial obligations — an outcome that is more likely today as the U.S. reached its legal borrowing limit. A default would hit the nation’s seniors especially hard, as the payment of Social Security, Medicare, and Medicaid benefits would be jeopardized.” – Max Richtman, 1/19/23
Without the legal authority to borrow beyond the current debt ceiling, Social Security, Medicare, Medicaid, and other payments may not be made on time and in full unless Congress approves an increase in the debt limit. Even a short delay in the payment of Social Security benefits would be a burden for the millions of Americans who rely on their earned benefits to pay for out-of-pocket health care expenses, food, rent and utilities.
Republicans have threatened to use the debt ceiling crisis to extract concessions on spending from Democrats and the White House. Seniors’ advocates became especially concerned when key GOP members seemed to suggest that this crisis presented an opportunity to force changes to ‘entitlements.’
President Biden has vowed to veto any legislation that would cut Social Security, Medicaid, and other vital social safety net programs. Today, the White House announced that the President would not negotiate with Congressional Republicans about the debt ceiling. Senate Republican Leader Mitch McConnell told CNN today that negotiations are inevitable, but that “America has never defaulted on its debt and never will.”
While cooler heads may prevail in the Senate, the ultra-MAGA faction of the House GOP caucus has insisted that there cannot be a ‘clean’ lifting of the debt ceiling without pre-conditions. In order to become House Speaker, Kevin McCarthy agreed to demands by right-wing Republicans that raising debt ceiling must be tied to spending cuts.
“If the House GOP refuses to raise the debt limit and replaces responsible governance with fiscal extortion, our most vulnerable citizens will pay the price. This is definitely not what the American people voted for last fall.” – Max Richtman, 1/19/23
In 2011, Tea Party Republicans pushed the country to the brink of a default in an attempt to force spending cuts. Democrats stood firm against the GOP’s demands, but the outcome of that debt battle included GOP-imposed spending caps which hobble Congress to this day — and the downgrading of the United States’ credit rating around the world. Senator Chris Coons (D-CT) said Thursday afternoon, “I was here 12 years ago and it didn’t work out for (Republicans) then, and I don’t think it will work out for them now.”