Senate Majority Leader Chuck E. Schumer warned on Wednesday that the House Republicans’ plan to stop paying the nation’s bills and default on the debt would spell an “economic nightmare” for Upstate New York families. The senator urged congressional Republicans to think about the local communities and families they represent before supporting a politically extreme and economically disastrous path that risks a first-ever default by the United States government.
If the U.S. were to default, Schumer said, it would risk benefits for over 1.8 million Upstate New Yorkers who receive $3 billion in Social Security benefits each month, threaten the health of those on Medicare, hinder care for veterans, risk disruptions for those who rely on SNAP, and lead to surging mortgage rates and increasing housing costs. It would also blow a hole in the deficit and cause a sharp rise in unemployment.
“We cannot let the extreme views of a few who want to play chicken with the debt ceiling and recklessly risk driving the American economy off the cliff put Upstate New York families’ wallets at risk,” Schumer said. “This is not an abstract issue, if these irresponsible extremists fail to allow America to pay its bills and default, Upstate New Yorkers could see real dollars from so much of what they own disappear from their monthly Social Security checks, their retirement savings, their home value.”
Schumer urged Democrats and Republicans to come together, as they have always done before regarding the debt ceiling, to ensure America continues to pay its bills on time. He added that Upstate New York families have very specific reasons to worry about the debt ceiling.
A debt default would be catastrophic for Upstate New York’s many retirees who could lose an estimated $20,000 in retirement savings. In Upstate New York, there are over 1.8 million Social Security beneficiaries that receive nearly $3 billion in benefits each month.
A default could throw these payments in jeopardy for beneficiaries who earned these benefits.
Social Security payments could be at risk. Here’s how that would look across the region.
|Region||Social Security Recipients at Risk of Benefit Disruption||Estimated Benefits Received Each Month|
|Central New York||246,055||$380,611,000|
Medicare payments could be interrupted, threatening the ability of New Yorkers on Medicare to receive and/or pay for healthcare.
In total, New York State could see 3,766,000 Medicare beneficiaries lose or have benefits interrupted. Medicare reimbursements for Upstate NY hospitals and other providers could also be interrupted leading to severe financial distress and even closures for these critically needed community services.
|Region||Medicare Recipients at Risk of Benefit Disruption|
|Central New York||237,000|
Veterans across Upstate New York who rely on the government for their disability, health care and pension benefits could be left with no support.
|Region||Estimated Veteran Population at Risk of Benefit Disruption||Total Expenditures for Direct Benefits To Veterans Including Medical Care, Pensions, etc. in FY21|
|Central New York||65,000||$640,290,000|
- Upstate NY Families who rely on federal benefits to keep food on the table could be impacted. If the Treasury is unable to meet its obligations due to default, families who rely on federal nutrition assistance such as SNAP, WIC, or TANF could risk benefit disruption.
- 2,830,000 New Yorkers across the state depend on SNAP to get the nutrition they need. SNAP is a lifeline for many people who struggle to make ends meet.
- 1,651,000 children in New York State receive free or reduced price meals through the National School Lunch Program. For many children, school meals are the most reliable meals they get during the day. Free and low cost school meals ensure that all children, regardless of their family’s income level, get the food they need to grow and learn at school.
MOTRAGES RATES, CREDIT CARD RATES, OVERALL INTEREST RATES, LIKE CARS & SMALL BIZ
- Moody’s predicts a default could surge new mortgage rates to over 8% –– adding significantly to the cost of a new home loan. At a time when mortgage interest rates are already sky high, the GOP threatens to send home financing costs even higher. Even the mere threat of default could send interest rates souring just as inflation is beginning to cool.
- Schumer says overall interest rates are likely to increase. Default will trigger a liquidity shortage, making new student, small business and car loans costly and scarce.
- It would also cause college financing costs to rise.
- Upstate New York is home to dozens of public and private colleges, and 58% of New York college students graduate with debt and borrow more than the national average student debt loan of more than $30,000.
- Auto loan interest rates for new cars are already at their highest since 2019, and at their highest rate for used cars since 2010. The average cost of a used car in Albany is $33,200, a default will cause a spike in borrowing costs as interest rates skyrocket, adding almost $3,000 to the financing cost of the car.
- The average interest rate on bank-issued credit cards is already high, reaching 19.1% late in 2022, according to a Federal Reserve consumer credit report released January 9th, marking the highest rate since the government began tracking this data in the 1970s.
“Look how clear it is: local economies, everyday wallets and Upstate NY families will take the hit should we default and stop paying our bills,” added Schumer. “The larger Republican Party wants to work with Democrats to prevent this needless economic crisis, but it will take the public putting pressure to inoculate the fringe of the party and for bipartisanship to prevail in making sure America is able to pay its debts on time. So, my warning today hopes to wake up the larger Republican Party to bipartisan cooperation as we have always done and prevent this economic nightmare for Upstate New York from ever happening,” added Schumer. “From mortgages, to overall interest rates, social security and more, it is clear who will actually pay the price for some gratuitous, partisan default: Upstate New York.”
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected]