Debt ceiling default would be ‘economic nightmare,’ says Schumer

Published: Jan. 25, 2023 at 5:58 PM EST
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WATERTOWN, New York (WWNY) - The United States reached its $31.4 trillion debt ceiling last week. That’s the amount of money it can borrow to pay its bills.

Eventually, some of those bills could be benefits you receive, like Social Security, or maybe you’re a veteran.

As a small number of Congress members might be okay with defaulting or missing its payment deadline, U.S. Senate Majority Leader Chuck Schumer is asking for bipartisanship.

Senator Schumer says it would be an “economic nightmare” for New Yorkers if the U.S. defaults.

“Default means real dollars coming out of upstate families’ pockets. Mortgages, car loans, credit card rates will all go up,” said Schumer (D. - NY).

Schumer spoke Wednesday in the wake of the United States reaching its debt limit, explaining a default could make the interest rates you pay on a mortgage or a car, go up.

“As we get closer and closer to the day we have to act, upstate New York families will see this,” he said.

Schumer is concerned a default can cause an economic crisis leaving lasting effects on retirement accounts, Medicare, Social Security and veteran benefits.

“It would have a devastating effect on our military, our soldiers, on Fort Drum. Veterans would be Affected across upstate New York. Veterans rely on the government for their disability, their health care, their pension benefits. Those could be wiped out or greatly, greatly reduced,” he said.

Schumer asked for Republicans and Democrats to come together to avoid a default. He believes that a few, what he calls fringe right-wing MAGA extremists, do not represent the G.O.P. as a whole, but are preventing a deal to get done between both sides of the aisle.

The big hold-up between the two sides is spending. A small group is saying it will not agree to raise the debt ceiling until cuts are made in spending by the U.S.