Social Security, Child Tax Credit Payments Could Be Delayed If Congress Does Not Raise Debt Ceiling



Social Security payments could be delayed. The next monthly child tax credit payment may not be sent on time. Food stamp recipients may be left on hold for funds.

Indeed, unless Congress suspends or increases the debt ceiling in the coming weeks, the federal government will no longer be able to borrow to pay for its operations, forcing it to limit its spending.

“In a few days, millions of Americans could be strapped for cash,” Treasury Secretary Janet Yellen wrote in a Wall Street Journal Editorial. “We could see indefinite delays in critical payments. Nearly 50 million seniors could stop receiving Social Security checks for some time. Troops could go unpaid. Millions of families dependent on the tax credit children’s monthly might see delays. “
Although officials have warned for months about the need to tackle the debt ceiling, Congress is at an impasse. The House passed pro-party legislation to suspend the country’s borrowing limit and prevent a government shutdown at the end of the month, but Senate Minority Leader Mitch McConnell and his Republican colleagues said they would not support her.
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A default and prolonged stalemate would have major implications for the national economy, with cuts in federal spending potentially triggering a downturn comparable to the Great Recession, according to Moody’s Analytics. Nearly 6 million jobs could be lost, stock prices could fall by a third and around $ 15 trillion in household wealth could evaporate

What this would mean for Americans remains uncertain as Congress has intervened to increase, extend or revise the definition of the debt limit in the past.

These benefits could be affected

The Treasury Department could still pay some of its bills because it would still have tax revenue, but it is unclear what it would decide to pay and when, experts said.

“Almost everyone is likely to be affected in one way or another,” said Paul Van de Water, Center-Left senior researcher on budget and policy priorities.

Among them would be Social Security beneficiaries, who would be at risk of not receiving their payments for the first time since the program was created in 1935, said Max Richtman, CEO of the National Committee for the Preservation of Social Security and the ‘Health Insurance. They are expected to receive $ 90 billion in payments in October.

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Some 40% of beneficiaries depend on monthly checks for at least 90% of their income, and two-thirds of beneficiaries depend on infusions for at least half of their income, he said.

“Not having a check for a few weeks or a month is devastating,” Richtman said. “The beneficiaries will have to decide: do I pay my rent? Do I buy food? Do I buy my medication?

The roughly 35 million parents who are expected to receive three more monthly payments of the enhanced child tax credit this year may also have to wait for funds if they default.
RELATED: Some Parents Miss September Child Tax Credit Payment
The Internal Revenue Service is expected to send about $ 15 billion in payments on the 15th of every month, and many families depend on the money to buy food and items for their children. Parents receive up to $ 300 for each child up to age 6 and up to $ 250 for each age 6 to 17.

Meanwhile, more than 42.3 million Americans who receive food stamps could be left waiting for their monthly benefits – an average of $ 227 per person.

What the White House says

The White House exposed the consequences of a default last week, listing six key areas where federal funding to state and local governments could be delayed.

  • Tens of billions of dollars in disaster assistance annually to states and communities facing forest fires, floods and other natural disasters.
  • Over half a trillion dollars for Medicaid and the Children’s Health Insurance Program, which covers 1 in 5 Americans.
  • More than $ 30 billion for nutrition assistance for children’s school meals, which serve 30 million children, as well as the Women’s Infants and Children (WIC) program and Supplemental Nutritional Assistance Program, or SNAP, as food stamps are officially known.
  • About $ 100 billion in infrastructure funds for transit, highway and airport projects.
  • Over $ 50 billion in education money for Head Start, special education and other school programs.
  • Over $ 10 billion for public health programs.

Other Americans could also be affected, Van de Water said. Military service members may not receive their paychecks on time, and an estimated 6 million veterans and their survivors could have their benefits suspended.

“Virtually every payment could experience some sort of delay or reduction,” he said.



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