If MAGA Republicans Force A Default, Social Security, Medicare, And Veterans Benefits Will Be In Limbo, Retirement Savings Could Lose Billions, And Mortgage Payments, Car Loans, Credit Card Rates Will Go Up
Washington, D.C. – Senate Majority Leader Chuck Schumer, Senators Sheldon Whitehouse (D-RI), Chris Van Hollen (D-MD), and Catherine Cortez Masto (D-NV) held a press conference today to call on MAGA Republicans to stop playing politics and pay America’s bills without brinkmanship or hostage-taking. The Senators outlined the devastating impacts a default would have on every single American family, raising mortgages, car loans, and credit card rates and jeopardizing retirement savings. Senate Democrats have made clear they will fight to protect veterans benefits, Social Security and Medicare and won’t give in to the extreme wing of the Republican party.
“A MAGA Republican led default would be an economic nightmare for American families, affecting everything from Social Security and Medicare to car and home prices, retirement savings, and more. We will not let House Republicans use the American people’s livelihoods as a bargaining chip. We’ve raised the debt ceiling without brinkmanship under past Democratic and Republican Presidents and we must do that again. Let's get this done,” said Leader Schumer.
“The full faith and credit of the United States is a national asset. It is a pearl beyond price that has withstood wars and depressions, and today’s MAGA Republicans threaten its destruction,” said Senator Whitehouse. “They threaten to raise rates for homeowners, car buyers, credit card holders, and for people who have insurance policies. They threaten MAGA bedlam. We really can’t let that happen. There are too many people who are counting on this.”
“When Republicans threaten to stop the United States from paying our bills on time they are violating their constitutional duties and putting our entire economy at risk to impose their extreme agenda on the American people. If they want to talk about budget priorities, they should come out from behind closed doors and pass a budget resolution instead of endangering the full faith and credit of the United States, which would devastate American families,” said Senator Van Hollen.
“Defaulting on our debt puts our seniors, veterans, servicemembers, and all Nevadans at risk. Tens of thousands of Nevadans could lose their jobs and access to health care, housing prices would skyrocket, and our national security could be compromised. It's time to stop playing political games with working families' livelihoods,” Senator Cortez Masto.
I thank my colleagues for joining me on a topic that means so much to us, to the rest of America, and frankly, to every American family. And that is making sure that America pays its debts. Of course, everyone thinks about the fiscal implications for the federal government. But we're here to talk about this as an economic nightmare for every American family.
This is devastating for them. It's never happened in the history of the country. It would threaten the health we know of our economy, and the very stability of the global financial system just at a time when we're recovering, all at the hands of a handful of MAGA extremists in the House Republican Party. But that's the almost abstract parts of it. This default would mean real dollars coming out of American families’ wallets. Mortgages, car loans, credit card rates, would all go up.
Moody's, for instance, predicts a default could raise interest rates substantially, [potentially] a surge in new mortgage rates to over 8%. It is estimated on an average house over the years of a mortgage, it could cost the average mortgage owner $100,000 to $120,000 – $ 100,000 to $120,000 more - when you're buying a home for many Americans. Retirement savings, the money workers have spent their entire life for, putting in that money every couple of weeks so they could live a life of some dignity in retirement, they could lose billions as default careens the economy into a stock market crash. A report from Third Way found the average retirement savings would be down $20,000. Every week, people put in their $20, their $50, hoping, again, I’ll have a decent retirement. $20,000 down the drain because of the brinkmanship and irresponsibility of MAGA Republicans who are playing this default.
There are over 65 million seniors who are relying on Social Security and Medicare to make ends meet. One in four seniors relies on Social Security for 90% of their income. Congress can't play a game with this. And we have numbers in our states: in New York, 3.7 million on Medicare and Social Security, 5.8 billion in Social Security checks. And we have the numbers in your releases for Maryland, Rhode Island, Nevada, and New Mexico. So all of these folks would be at risk as their retirement savings is worth much, much less.
Veterans across the country, they rely on their government for their disability, their health care, their pensions, could be left with no support. Medicare reimbursements for our hospitals would go way down. Health care treatment would be worse, health care treatment would be more expensive and there'd be massive layoffs at so many of our hospitals and particularly in rural areas, many of my counties, the hospital is the largest employer. Food on the table. 42 million Americans get it.
And so we can think of scenarios. I think of a senior in Albany who can't afford the rent because their Social Security was delayed. A disabled veteran in Baltimore who won't know if he or she can get the care he or she needs. A parent in Albuquerque that relies on SNAP and doesn't know if they can feed their kids. A family in Bristol who just bought their first home and now their mortgage is sky high. A local hospital in Carson City having routine procedures and coverage disrupted.
It would be chaos. It would be an economic disaster. Interest rates go skyward, that affects everything: cars, homes, credit cards, student loans. Stock market goes down dramatically, that affects the retirement savings of people who have 401(k)s, IRAs. It's going to be, as Mark Zandi – hardly an extreme person, hardly a progressively liberal – says, ‘It's going to be bedlam.’ And that's probably the most appropriate word.
So, we say to Leader McCarthy, Speaker McCarthy, we say to our Republican colleagues in the House and Senate, the debt ceiling should not be a bargaining chip. Because people's lives are at stake. Families, incomes are at stake. People's jobs are at stake. Retirement benefits are at stake. That is why in the past under Democratic and Republican Presidents we have passed – we have raised the debt ceiling without brinkmanship without coming right up to the line and going over it. We must do that again. No hostages. No brinkmanship. Let's get this done. Our view they are to show us their plan. We don't believe they have a plan they can actually pass with Republican votes in the House. But that's the first step to moving forward. But when they realize how risky this is and how it affects average Americans, I believe that we can all come together, pass the debt ceiling clean as President Biden asked for it last night. Thank you.