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RELEASE UPDATED: Senate Majority Leader Schumer, House Democratic Leader Jeffries, Senators Heinrich And Smith, And Representatives Beyer And Moore Re-Release JEC Report Detailing The Catastrophic Effects Of A Republican Default Crisis, Add CEA Report Details

As Deadline To Pass A Clean Debt Ceiling Bill Approaches, Democrats Highlight New Numbers From The Council Of Economic Advisers Showing Catastrophic Risks To The Economy

House Republicans Are Gambling With American Families’ Pocketbooks, Threatening To Drive Up The Cost Of Mortgages, Car Loans, Credit Card Interest Rates, Small Business Loans And More

The Extreme MAGA GOP Must Stop Their Brinkmanship, Work With Democrats to Pass A Clean Debt Ceiling Bill And Avoid Default


As the deadline to pass a clean debt ceiling bill approaches, Senate Majority Leader Chuck Schumer (D-NY), House Democratic Leader Hakeem Jeffries (D-NY), Joint Economic Committee Chairman Martin Heinrich (D-NM), Joint Economic Committee Senior House Democrat Don Beyer (D-VA), Senator Tina Smith (D-MN) and Representative Gwen Moore (D-WI) updated and re-released a Joint Economic Committee Democratic staff report outlining the devastating cost of the Republican default crisis. The report includes new details from a Council of Economic Advisors report and highlights how raising the debt limit is essential for the United States to continue to keep its promise to veterans, military personnel, and seniors; how a default would push up costs for families and small businesses; and how defaulting would cause economic catastrophe and risk millions of jobs.  

“This report shows that a Republican default crisis means real dollars coming out of American families’ wallets and savings decimated. This is not a hypothetical exercise to the millions of Americans – including veterans and seniors – who rely on the United States government for benefits, pensions, and disability,” said Senate Majority Leader Chuck Schumer. “House Republicans’ approach is dangerous and destabilizing. Even the threat of a breach will raise costs on everything from car loans to mortgages.  Republicans are gambling with Americans’ savings, benefits, and lives, all to play a political game.”

“This Republican-generated default would blow up the United States economy, trigger a job-killing recession, dramatically raise costs, crash the stock market and destroy the retirement security of millions of Americans,” said House Democratic Leader Hakeem Leader Jeffries.  “This catastrophe has to be avoided. We must raise the debt ceiling in a manner consistent with what has been done over 100 times under Democratic and Republican presidents. It is time for the extreme MAGA Republicans to end the brinksmanship, end the partisanship, end the gamesmanship and ensure that America can pay its bills on time.”

“Republicans have created a default crisis that will undermine confidence in America’s commitment to pay its bills and drive up costs for working families—from mortgages, car loans, student loans, and small business loans to the costs of many consumer goods. Jobs are in peril, people on Social Security and Medicare could see their benefits disrupted, and veterans benefits could be in jeopardy. This new Joint Economic Committee Democratic Staff report puts in real terms those devastating economic impacts. The debt ceiling is not a bargaining chip. Congress must act to cover existing obligations before the steep costs to the American people worsen,” said Joint Economic Committee Chairman Heinrich.

“A decade ago credit rating agencies downgraded the U.S. credit rating after Republican debt limit brinkmanship, and it drove borrowing costs for the American people higher in a variety of ways. This Joint Economic Committee report quantifies what kind of damage regular people could see if that happens again, and it is very bad,” said Joint Economic Committee Senior House Democrat Don Beyer. “Regular people could see increases in credit card debt, higher car payments, rising costs for small business loans, and student loans that cost thousands of dollars more over the life of the loan. Virginians could pay an average of $150 more on their mortgages. This would affect everyone who borrows money, including the United States government, which would have to pay more in its borrowing costs. In other words, Republican hostage-taking on the debt limit would actually increase the deficit.” 

“This new report lays out how, if MAGA Republicans in the House refuse to do their jobs, hard-working families in Minnesota, and across the country, would feel the consequences of their irresponsibility,” said Senator Tina Smith. “Defaulting on the debt would cause a global financial crisis. In Minnesota, that means lost jobs, skyrocketing interest rates, homes lost, and farms in default. There is a reason why everyone—from Wall Street to Main Street in Minnesota—believes this must not happen. The Republican proposal – holding our economy hostage to decimate programs that are essential for seniors, veterans, and working families – is dangerous and irresponsible. We are united and calling on these MAGA Republicans to put their politics aside and do their jobs.”

"I have a great granddaughter that falls out and rolls on the floor when she can't have her way. I tell her she needs to get up because she’s not gonna get it. Republicans need to get up and stop holding our economy hostage. We are not going to devastate our seniors and our children, and we will not sabotage the world's standard credit rating. Republicans need to get up off the ground and raise the debt limit!” said Representative Gwen Moore.

The Republican default crisis would push up costs for families and small businesses and trigger a recession. 8.3 million people would lose their jobs this summer as the unemployment rate spikes up to 8.6%, and GDP shrinks by 6.1 percentage points.

Even before the debt ceiling is breached, Americans will see the effects of this chaos in everything from their mortgages to their car payments. According to the new JEC report:

  • An American, working their whole life and finally approaching retirement, could lose almost $20,000 out of their savings.
  • A new homeowner could see their monthly mortgage payment go up more than $160 a month, which means $58,000 over the life of the loan.
  • A family looking to purchase a new vehicle could pay almost $1,000 more for a car.
  • Small business owners could have loans increase by $2,500.
  • Graduates with private student loans could see their monthly payments rise, costing them nearly $4,200 more in total.

Moreover, these reckless debt limit threats could weaken the dollar, increase the costs of imported goods, and ruin American families’ purchasing power.

The United States also has an obligation to keep our promise to veterans, military personnel, and seniors.

  • After fighting and serving our country, 18 million veterans would be at risk of losing disability, healthcare and pension benefits if the Republicans allowed us to default on the debt.
  • 65 million Americans would stop receiving social security checks – the very bedrock of financial stability for most seniors.

Threatening the full faith and credit of the United States would cause an economic catastrophe. It would cause a global market panic, risk millions of jobs, and hurt American families.

Republicans must stop gambling with the pocketbooks of American families and the working class and raise the debt ceiling to stop this economic devastation.