Washington, D.C.– Senate Majority Leader Chuck Schumer (D-NY) today spoke on the Senate floor on the need to avoid catastrophic first-ever default. Below are Senator Schumer’s remarks:
As Democrats continue upholding our responsibility to preserve the full faith and credit of the United States, the position of the President, of Leader Jeffries, and of myself has not changed: default must be taken off the table.
Never in the history of our country have we failed to pay our bills on time. To default now would mean crossing a terrible point of no return, where the biggest losers will be America’s seniors, America’s small businesses, America’s working and middle class families, and everyone – everyone – who relies on Social Security, Medicare, and pension payments – 401(k)s.
Last Friday, I wrote a Dear Colleague to my Senate colleagues explaining just how destructive a first-ever default would be. I warned – as many economists have warned – that a first ever default would crash the economy, increase costs, and kill jobs.
Crash the economy. Increase costs. Kill jobs. Who would want that?
But that’s what awaits American families on the other side of the X date, if no action is taken. According to experts, a default would almost certainly plunge the United States into another recession, shrinking GDP growth by an alarming 6%.
A first ever default would make life’s most important expenses far more costly: mortgages, car payments, student loans, small business loans all would skyrocket. They would not just go up half a point. They would go up a lot. But the value of retirement accounts, which Americans spend their whole lives, every two weeks, every month, every six months, putting that money in so they would have a decent retirement, would nosedive – nosedive.
And of course, if the United States defaults in a few weeks for the first time ever, experts warn as many as 8.3 million jobs would be lost.
It would be a catastrophe. No one should play with it. No one should flirt with it. No one should hold it hostage and say “unless you do this, we are going default” because the consequences of default are just awful.
Americans have been to hell and back over the past couple of years as we have tried to recover from record unemployment we saw during COVID. And Americans are coming back. I spoke at a whole bunch of college graduations this weekend and the students had been through COVID, had missed sometimes a year of school, a year and a half of school, six months of school, but they were bouncing back, raring to go. It gave me some faith in the future of the country. But if default were to hit them and the rest of the country, wow, that would be awful.
So for all of these reasons, and many more, I insisted last week, along with President Biden, along with Leader Jeffries, that default be off the table. Speaker McCarthy must commit to the same, not saying unless you do this or do that, we will default. The consequences of default are too terrible and defaulting would mean that we would force Americans, as we recuperate from the pain of COVID, to go through what might even be a greater pain in a few short years after COVID had reached its zenith. That alone should push leaders on both sides to agree default is not an option under any scenario.
For decades, Democrats and Republicans have worked out our differences about spending and revenues through the annual budget process. That process began earlier this year when the President released his budget proposal.
This week, both sides are continuing to hold parallel discussions about the budget: what we should do with revenues, what we should do with spending, as Congress does every year. These conversations are going on right now among the four leaders and the President’s representatives as I speak. And I am glad these conversations are continuing in a very, very serious way.
The President, Leader Jeffries, myself, we welcome a bipartisan debate about our nation’s fiscal future. But we’ve made it plain to our Republican colleagues that default is not an option.
Its consequences are too damaging, too severe. It must – must – be taken off the table.