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By: USA today
Editor’ Note: My gut instinct tells me the us Debt ceiling will NOT be raised before Thursday, June 1. What does this mean for those on Social Security? It means your SS Check may NOT arrive…this decision has not yet been made!
If you can, rely on friends/neighbors for food or supplies. Stock up on extra supplies if you can right now. My feeling is for this situation to be resolved in a beautiful and unexpected way.
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With the White House and congressional leaders divided over raising the debt ceiling, the U.S. could run out of money to pay its bills as soon as June 1.
If lawmakers fail to raise the debt limit, the economic impacts could be wide-ranging, affecting everything from interest rates to the stock market
While consumers may be nervous about the potential implications, there are some steps they can take to safeguard their finances. “I think the biggest thing is reviewing your entire financial situation, always remembering that you should focus on what you can control,” said Dominique Broadway, a personal finance expert and founder of Finances Demystified.
‘Time is running out’:What to watch for in latest Biden, McCarthy meeting on debt ceiling
What is the debt ceiling?:What happens if we default, and why you should care
How could the debt ceiling fight impact you?
If the government fails to raise the debt ceiling, that does not necessarily equal default, according to Jamie Cox, managing partner at Harris Financial Group. While the government would not be able to borrow additional money beyond the debt limit to meet its obligations, there would still be revenue coming in.
“The chances of the U.S. defaulting are very low,” he said. “That doesn’t mean there wouldn’t be economic consequences, or real consequences to individuals if the government doesn’t authorize the debt limit to be increased.”
Cox said the government would prioritize payment of its bonds and preserve the integrity of the U.S. Treasury, but may not authorize other payments from programs Americans rely on, such as Supplemental Security Income or food stamps. “So, the economic impact would be far and wide reaching and would definitely reach those individuals least able to afford it,” he said.
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Time is running out to avoid the “X date,” the fiscal limit when the U.S. will run out of money to pay its bills unless Congress raises or suspends the nation’s debt ceiling. That may sound arcane, but it has very real implications for the 66 million people — retirees, disabled Americans and children — who receive Social Security benefits.
If the U.S. defaults on its obligations, Social Security recipients could see their checks delayed, according to experts. That could pose a financial hardship for many beneficiaries, especially the millions who rely on Social Security as their main source of income.
Still, the political uncertainty around the fight over the debt ceiling makes it hard to predict what would happen with Social Security, partly because of conflicting laws. And because the U.S. has never defaulted on its debt — a possibility that Treasury Secretary Janet Yellen said would lead to an “an economic and financial catastrophe” — there are no precedents that offer a guide to how the situation could play out.
If the U.S. defaults, “it is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security,” Yellen said late last month.
Here’s what to know about Social Security and the bitter partisan fight over the nation’s debt limit.
What is the debt ceiling?
The debt ceiling, also called the debt limit, is set by Congress and represents the maximum amount the federal government is allowed to borrow to pay its debts.
If the amount of government debt reaches that threshold and lawmakers fail to lift the borrowing limit, the U.S. would be unable to pay what it owes and could default.
How close is the U.S. to hitting the debt ceiling?
Estimates vary, but the U.S. is likely just weeks away from breaching the debt ceiling.
The “X date” could arrive as soon as early June to early August, the Bipartisan Policy Center recently projected. And Yellen warned congressional leaders in a letter last week that the U.S. could be unable to pay its bills as soon as June 1.
How could Social Security be affected?
Payments to Social Security recipients, as well as payments from the federal government to veterans, food-stamp recipients, and reimbursements to state governments for Medicare or Medicaid, could be delayed, credit ratings agency Moody’s said in a recent report.
To complicate matters, there are conflicting laws about Social Security payments, notes Mary Johnson, the Social Security and Medicare policy analyst at the advocacy group Senior Citizens League.