Debt Ceiling: The impact on seniors, people who rely on social security
PHILADELPHIA (CBS) -- If the government fails to raise the debt ceiling, it could have real-life effects on your wallet. We know many people live paycheck to paycheck and we wanted to find out what this means for you.
One expert told CBS News Philadelphia Thursday that allowing the U.S. to default on its debt would be devastating and that we're already seeing impacts from this fight with interest rates rising in the last month. People we talked with are nervous, particularly seniors.
Many in our area have strong feelings when talking about the gridlock in Washington over the debt ceiling fight. Talks continue as we close in June when many bills come due.
Bill Hoagland with the Bipartisan Policy Center says the timing on the situation is fluid but if there isn't a deal by the time the U.S. runs out of cash, Americans would see interest rates climb and stocks would likely take a big hit.
And that's just the tip of the iceberg.
"Things like not paying social security benefits on June 1, which are about $40 billion that would go out on June the first," Hoagland said. Also, it's possible we wouldn't be able to pay the military or the workforce here."
The impacts could be outsized for seniors and people who rely on social security payments.
Chris Laine of Philadelphia says he and his partner live comfortably but he wouldn't be immune if payments stopped.
"What it would mean for me is certain bills I would have to go back to minimum payment," Laine said.
Sheilah Greene has been through these conversations before as a staffer in the U.S. Senate. Greene says seniors are already dealing with the stress of possibly not seeing their next check but a default would put them in a bad situation.
"Not being able to pay the bills. Not being able to buy food," Greene said. "Not being able to get their medicine if they have to pay a co-pay or something."
Greene and Hoagland have seen this fight enough times. They have confidence cooler heads will prevail and a deal will get done.
But they both said if you can, prepare and cut back on discretionary spending over the next few days and weeks until things shake out.