As the U.S. edges closer to a self-inflicted economic disaster whose most immediate cause is House Republicans’ refusal to raise the debt ceiling unless President Joe Biden agrees to slash social programs and give the fossil fuel industry more handouts, the earliest potential victims of the GOP’s hostage situation—which could provoke the nation’s first-ever default as early as June 1—are coming into view.
“Seniors nationwide are on the frontlines of the fight to raise the debt ceiling, because if the federal government can’t make a June 2 payment slated for Social Security recipients, the oldest beneficiaries—those over 88—and people with disabilities will be the first to suffer,” The Washington Postreported Wednesday amid ongoing negotiations. “Roughly $98 billion worth of benefits, including Medicare, Medicaid, and military and civil retirement payments, are scheduled to go out in the first two days of June, according to an analysis by the Bipartisan Policy Center.”
“Social Security benefits are distributed four times a month, but the earliest round of payments go to retirees older than 88 years, as well as people with disabilities and seniors with especially low incomes—and less than $2,000 in assets—who are eligible for Supplemental Security Income (SSI),” the Post noted. “Even a weeklong holdup, economists say, could be devastating for the roughly 27 million Americans who rely on Social Security for most of their income. Food insecurity and poverty rates will almost certainly rise, and people will probably forgo medical treatments, as families struggle to make do without necessities.”
“There’s no fallback if these checks are late,” Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, told the newspaper. “These are people who are literally not allowed to have emergency savings.”
Progressives have long accused House Republicans, who know full well that failing to increase the federal government’s arbitrary and arguably unconstitutional borrowing limit prior to the quickly approaching default “X-date” would unleash devastating impacts domestically and globally, of weaponizing the nation’s credit rating to advance their reactionary agenda. With a five-seat House majority and the ability of any party member to introduce a motion to remove the speaker—a rule the far-right Freedom Caucus secured in exchange for electing Rep. Kevin McCarthy (R-Calif.) to the role—the GOP has significant leverage over the fate of the U.S. and world economy.
Earlier this week, Rep. Matt Gaetz (R-Fla.) admitted that his party, led by the House Freedom Caucus to which he belongs, is exploiting the ongoing standoff in a bid to gut the nation’s already meager welfare state and weaken its embryonic climate policies.
Referring to the austerity-or-default bill House Republicans approved last month, Gaetz told reporters, “My conservative colleagues for the most part support Limit, Save, Grow, and they don’t feel like we should negotiate with our hostage.”
Soon after the passage of the Limit, Save, Grow Act, the White House abandoned Biden’s earlier refusal to hold debt ceiling negotiations and began signaling its openness to certain GOP proposals, only for McCarthy to make even more extreme ransom demands and constantly move the goal posts.
As the Post reported: “Republicans in Congress have maintained that they don’t want to cut Social Security benefits, though at least one recent budget blueprint calls for raising the eligibility age for full retirement from 67 to 70 to account for longer life expectancies. The GOP has also proposed a host of cuts and additional work requirements for other federal benefits, such as Medicaid and food stamps, that experts say would have an outsize impact on the country’s seniors.”
In a Thursday statement, Accountable.US spokesperson Liz Zelnick said that “every option on the table from the MAGA House majority leaves millions of vulnerable seniors worse off—either extreme cuts against seniors’ health and food security, or a manufactured default crisis that delays Social Security checks many can’t live without.”
Biden and House Republicans have yet to reach an agreement. According to Thursday reporting from The Associated Press on the contours of a possible deal, the GOP may abandon its demand to further boost military spending in favor of maintaining the already historically high levels proposed by Biden, while Biden may agree to roll back Internal Revenue Service (IRS) funding if the GOP lets his administration funnel that money into the social safety net.
The fact that Capitol Hill’s deficit hawks are eager to attack the poor but don’t support reducing the ever-expanding Pentagon budget or hiking taxes on corporations and the rich to increase revenue exposes the “fraudulent” nature of their current crusade, journalist David Sirota tweeted.
Rescinding the recently enacted IRS funding boost would help wealthy households evade taxes, adding an estimated $114 billion to the federal deficit. Meanwhile, House Republicans are reportedly working on legislation that would make permanent certain provisions in the 2017 Tax Cuts and Jobs Act, a Trump-era law whose benefits have flowed overwhelmingly to the top 1% while adding hundreds of billions of dollars to the deficit.
On Thursday, Rep. Rashida Tlaib (D-Mich.) sounded the alarm about House Republicans leaving the Capitol with no debt limit agreement reached just days before the X-date.
Tlaib, a member of the Congressional Progressive Caucus (CPC), was echoing warnings made Wednesday by CPC Chair Pramila Jayapal (D-Wash.) and Deputy Chair Ilhan Omar (D-Minn.), both of whom said that some Republicans are eager to create an economic crisis because they think it would help their electoral chances next year.
Notably, the latest episode of fiscal brinkmanship could have been avoided had Democrats listened to Sen. Elizabeth Warren (D-Mass.) and other progressives who called on the party to raise the debt ceiling—or abolish it altogether—when it still controlled both chambers of Congress last year.
Corporate Democrats refused to act during the lame-duck session despite Warren’s warning that GOP lawmakers desperate to win the White House in 2024 will “blow up the economy” and run ads blaming Biden for it.
A growing number of congressional lawmakers—including prominent progressives such as Sen. Bernie Sanders (I-Vt.)—have implored Biden to invoke his 14th Amendment authority to unilaterally avert a default, an option the president has thus far resisted.
On Thursday, Social Security Works and Indivisible led more than 30 progressive advocacy groups in urging Biden to take executive action to disarm the debt ceiling.
“The choice facing the executive branch is clear: Act or default; act or increase the suffering of millions; act or go into economic tailspin,” says the letter. “If Republicans in Congress prove unwilling or unable to produce the votes for a bill that avoids default without catastrophic cuts to critical programs, it will fall to you to protect working families from their economic sabotage.”
“You have promised to prevent a default, without granting legitimacy to the legislative hostage-taking being undertaken by congressional Republicans,” the letter concludes. “Fortunately, the 14th Amendment provides a clear route for you to deliver on that promise. We will stand with you should that route prove necessary.”