{"id":572964,"date":"2023-05-04T02:41:55","date_gmt":"2023-05-03T23:41:55","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-would-a-debt-ceiling-failure-mean-for-americans\/"},"modified":"2023-05-04T02:41:55","modified_gmt":"2023-05-03T23:41:55","slug":"what-would-a-debt-ceiling-failure-mean-for-americans","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-would-a-debt-ceiling-failure-mean-for-americans\/","title":{"rendered":"#What would a debt ceiling failure mean for Americans?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a276122754ef\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a276122754ef\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/what-would-a-debt-ceiling-failure-mean-for-americans\/#Social_Security_other_benefits_and_pay_could_be_delayed\" >Social Security, other benefits and pay could be delayed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/what-would-a-debt-ceiling-failure-mean-for-americans\/#Borrowing_costs_could_go_up\" >Borrowing costs could go up<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/what-would-a-debt-ceiling-failure-mean-for-americans\/#Financial_markets_would_take_a_hit\" >Financial markets would take a hit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/what-would-a-debt-ceiling-failure-mean-for-americans\/#Banking_crisis_could_extend_or_get_worse\" >Banking crisis could extend or get worse<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/what-would-a-debt-ceiling-failure-mean-for-americans\/#Whats_keeping_lawmakers_from_a_deal\" >What\u2019s keeping lawmakers from a deal?<\/a><\/li><\/ul><\/nav><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/6452d5a92758d1.41803110.jpeg?w=900\" \/><\/p>\n<div>\n<p>Lawmakers are bracing for what could shape up to be a dramatic few weeks for both parties, as they brace for a high-stakes battle over the nation\u2019s borrowing limit.\u00a0<\/p>\n<p>The Treasury Department said this week that the nation could have until as soon as the start of June before it exhausts the \u201cextraordinary measures\u201d implemented in January to keep the nation from defaulting on its debt.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p>Leaders have warned a default is possible if either side doesn\u2019t budge from their positions as Republicans and Democrats ramp up pressure. <\/p>\n<p>However, members on both sides have expressed confidence Congress will strike a deal in time to raise the debt limit, which caps how much money the Treasury can owe to cover the country\u2019s bills.\u00a0<\/p>\n<p>But here\u2019s what could h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>en if they fail.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Social_Security_other_benefits_and_pay_could_be_delayed\"><\/span><strong>Social Security, other benefits and <\/strong>pay could be delayed<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Experts warn a default could mean trouble for individuals relying on a check from the government, whether you\u2019re a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security recipient or a federal employee.<\/p>\n<p>In a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.brookings.edu\/2023\/04\/24\/how-worried-should-we-be-if-the-debt-ceiling-isnt-lifted\/\">recent report<\/a>, Wendy Edelberg and Louise Sheiner \u2014 both senior fellows at the Brookings Institution \u2014 said Social Security beneficiaries, agencies and contractors could see their payments delayed in such a scenario.\u00a0<\/p>\n<p>While both note in the report that federal agencies would still possess \u201clegal authority, provided by Congress, to obligate funds,\u201d they warn federal workers could also have to worry about delayed paychecks.<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>\u201cWe\u2019ve passed a law saying federal agencies have to do this, that and the other. We\u2019ve appropriated funds for that,\u201d Edelberg, director of The Hamilton Project, told The Hill on Wednesday. <\/p>\n<p>\u201cBut at the same time, we have a law on the books that says we\u2019re not giving Treasury the resources to pay the bills for that,\u201d she said. \u201cSo it just has two contradictory laws.\u201d<\/p>\n<p>While the Treasury would still be obligated to pay those workers in what lawmakers say is the unlikely event the federal government defaults, Edelberg said \u201cthey would just do it with, presumably, what could end up being a very large delay.\u201d<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<h2><span class=\"ez-toc-section\" id=\"Borrowing_costs_could_go_up\"><\/span><strong>Borrowing costs could go up<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Experts say the nation could see an increase in interest rates if the nation were to default.<\/p>\n<p>That in turn could have an impact on mortgage rates, credit card rates and more.\u00a0<\/p>\n<p>\u201cIf the U.S. government becomes even a slightly less reliable borrower, it will raise the interest rates they get and it could raise the interest rates throughout the United States for everybody,\u201d Keith Hall, who led the Congressional Budget Office from 2015 to 2019, told The Hill on Wednesday.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<p>John Buhl, a researcher at the Urban Institute, also described the \u201cspecial status\u201d the nation enjoys in the global market that allows the country to borrow funds at lower rates than other nations.\u00a0<\/p>\n<p>\u201cIt\u2019s estimated that the perception of U.S. Treasuries as a safe asset keeps rates 0.25 percentage points lower than those of other sovereign nations, which equates to tens of billions of dollars in annual savings for the federal government,\u201d he said.\u00a0<\/p>\n<p>\u201cA default would eliminate that premium and could massively increase federal borrowing costs. Of course, that risk is even higher because of the debt the federal government has taken on in the last decade or so,\u201d Buhl added.<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\"><\/aside>\n<h2><span class=\"ez-toc-section\" id=\"Financial_markets_would_take_a_hit\"><\/span><strong>Financial markets would take a hit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>On top of those effects, researchers see an even greater risk in what a possible default would mean for the financial markets here and abroad.\u00a0<\/p>\n<p>While some forecasts expect the nation will see a recession later this year, experts say a default would likely speed up that timeline.<\/p>\n<p>That\u2019s just the tip of the iceberg.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\"><\/aside>\n<p>If the nation were to default, Edelberg said the stock market could go into a freefall, with firms \u201claying off workers en masse because now they are worried about what the economy is going to look like over the next few years.\u201d<\/p>\n<p>\u201cEven the brinkmanship we saw in 2011 imposed costs on the economy. During that crisis, consumer confidence and the stock market plummeted. It also harmed the international reputation of the US,\u201d Buhl said. \u201cA repeat of that, let alone an actual default, would make the Fed\u2019s attempt at a \u2018soft landing\u2019 a lot more difficult.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Banking_crisis_could_extend_or_get_worse\"><\/span>Banking crisis could extend or get worse<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The banking crisis has also shown the sector has some fragility in some areas in recent months, as the sector recovers from three of the four biggest bank failures the country has ever seen. <\/p>\n<aside class=\"ad-unit ad-unit--mr7_ab\"><\/aside>\n<p>Concerns are also rising over the impact the Federal Reserve\u2019s continued rate hikes will have on the ongoing crisis.<\/p>\n<p>\u201cWhat we\u2019re seeing in the banking market is a huge crisis of confidence in the context of the safety and soundness of particularly the regional banks, but also, more broadly, of the banking system as a whole,\u201d Vanderbilt Law School professor Yesha Yadav said.<\/p>\n<p>Buhl also pointed to actions taken by the government to blunt the fallout and added that a default scenario would likely be even more difficult to handle, leaving \u201ca much larger scar on the economy.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Whats_keeping_lawmakers_from_a_deal\"><\/span>What\u2019s keeping lawmakers from a deal?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Just less than a month separates Congress and the Treasury\u2019s new June 1 deadline for when the nation risks default.\u00a0<\/p>\n<p>Lawmakers on both sides say the debt ceiling must be raised. <\/p>\n<p>But there is a deep divide in Washington over how to address the nation\u2019s borrowing limit.<\/p>\n<p>Republicans insist any increase be paired with significant fiscal reforms and cuts to domestic funding, but Democrats have pushed for a \u201cclean\u201d bill to lift the ceiling, instead calling for budget talks to be handled separately form debt limit talks.\u00a0<\/p>\n<p>In remarks on Wednesday, Federal Reserve Chairman Jerome Powell wouldn\u2019t offer advice to either side but said \u201cit\u2019s very important that this be done.\u201d<\/p>\n<p>\u201cA failure to do that would be unprecedented. We\u2019d be in uncharted territory and the consequences to the U.S. economy would be highly uncertain and could be quite averse,\u201d Powell said.\u00a0<\/p>\n<p>He also added that \u201cno one should assume that the Fed can protect the economy from the potential, you know, short- and long-term effects of a failure to pay our bills on time.\u201d<\/p>\n<\/div>\n<p>Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/business\/3986918-what-would-a-debt-ceiling-failure-mean-for-americans\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lawmakers are bracing for what could shape up to be a dramatic few weeks for both parties, as they brace for a high-stakes battle over the nation\u2019s borrowing limit.\u00a0 The Treasury Department said this week that the nation could have until as soon as the start of June before it exhausts the \u201cextraordinary measures\u201d implemented&#8230;<\/p>\n","protected":false},"author":1,"featured_media":572965,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/05\/6452d5a92758d1.41803110.jpeg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[74888,141564,142887,117,134343,117752,134353,109134,78807,116734,142888,138150,139529,4941,5069,134661,70550,73014,70551,991,142889,32681,141939,134345,134525,136951],"class_list":["post-572964","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-banking","tag-banking-crisis","tag-banking-industry","tag-business","tag-campaign","tag-colin-powell","tag-court-battles","tag-credit","tag-credit-cards","tag-debt-ceiling","tag-debt-default","tag-debt-limit","tag-defense-national-security","tag-donald-trump","tag-economy","tag-energy-environment","tag-federal-reserve","tag-health-care","tag-inflation","tag-joe-biden","tag-keith-hall","tag-politics","tag-politics-of-the-united-states","tag-state-watch","tag-student-debt","tag-washington-d-c"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/572964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=572964"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/572964\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/572965"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=572964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=572964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=572964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}