Failing to raise the U.S. debt limit in time would mean the first U.S. government debt default in history and a list of complications, including a delay in Social Security benefits.
By Josephine Nesbit
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“The federal government would have to significantly cut back spending, [which] would probably mean delaying about $80 billion in payments due November 1 to Social Security recipients, veterans and active duty military for as long as two weeks,” wrote Mark Zandi, chief economist at Moody’s Analytics in a new report.
Furthermore, Zandia added that if progress stalls through the full month of November, the Treasury would have to eliminate a cash deficit of nearly $200 billion, calling the potential economic scenario “cataclysmic.”
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In a recent op-ed in the Wall Street Journal, Treasury Secretary Janet Yellen cautioned that “nearly 50 million seniors could stop receiving Social Security checks for a time, troops could go unpaid,” reported ThinkAdvisor.
Additionally, families who rely on the monthly child tax credit could see delays, and “the current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost,” Yellen wrote.
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