John,

What is the cost of a federal default?

We know from 2011 that even the threat of a default can send financial markets plummeting, impacting the retirement accounts of millions of Americans as well as the global financial market. But how would this impact the day-to-day lives of working people, retirees, veterans, and more?

According to numerous economists, if Congress does not agree to raise the debt ceiling before a default, which is projected on or around June 1, the U.S. would plunge into an instant recession.¹

One million jobs would be lost in the first week with nearly eight million jobs lost if a default goes on for multiple weeks.² This is partially due to consumers pulling back on spending, impacting businesses’ ability to pay workers.

Federal payments to millions of families, retirees, veterans, and more would be delayed.

Sixty-six million people rely on Social Security each month to pay their bills and keep a roof over their heads. For 40% of recipients, Social Security makes up 90% of their monthly income. These payments would be delayed.

SNAP food stamp payments would be delayed, as would Medicaid payments to states and Medicare payments to hospitals and doctors―devastating to health infrastructure, especially in rural communities.

Two million federal workers, 1.4 million active-duty military personnel, plus government contractors would all see delays in payments. And veterans’ benefits, including disability payments and pensions, would be impacted.

Meanwhile the stock market would take a severe hit, dropping anywhere from 33 – 45%, wiping out $12 trillion of household wealth, including retirement accounts.¹

The political brinkmanship being initiated by right-wing extremists in Congress is putting the financial stability of the entire country in jeopardy.

Write to your senators and representative right now and demand they hold a clean debt ceiling vote now, without preconditions, to protect families, workers, the aging, veterans, people with disabilities, and federal employees from economic catastrophe.

Over the last two years, even under the cloud of a once-in-a-generation pandemic, the U.S. economy has made historic gains with unemployment near a 50-year low. But these gains could be wiped out if Congress fails to act.

That’s why we’re rallying our allies nationwide in demanding Congress take immediate action.

Write to your members of Congress today and demand a clean debt ceiling vote with no cuts to critical programs and services.

Congress must allow the federal government to pay the bills Congress has already incurred. Anything less than that puts the livelihoods of tens of millions of people at risk.

Thank you for taking action today,

Deborah Weinstein
Executive Director, Coalition on Human Needs

¹ The Potential Economic Impacts of Various Debt Ceiling Scenarios
² 5 ways a debt default could affect you