The debt ceiling crisis could be ‘financially devastating’ for Black Americans
Biden administration official Jared Bernstein tells theGrio Republicans have “weaponized” the debt ceiling limit, which could delay payments on Social Security and Medicare.
As the United States hits its borrowing limit, Republicans in Congress are using the looming debt ceiling crisis to bargain with Democrats and the White House in order to pay the nation’s bills.
But as GOP lawmakers aim to leverage its new majority in the U.S. House of Representatives in an effort to cut the federal government’s spending, the Biden-Harris administration has said such negotiations are out of the question.
The White House argues that it has the United States Constitution on its side: Section 4 of the 14th amendment states that payment of the nation’s debt “shall not be questioned.”
Jared Bernstein, a member of the Biden administration’s National Council of Economic Advisors, tells theGrio that raising the debt limit “should’ve already happened by now.” Instead, he says Republicans have “weaponized” the debt ceiling limit that would impact the nation’s credit rating and result in nonpayments for millions of Americans’ Medicaid, Medicare, Social Security and military checks.
“Those payments could easily be interrupted,” says Bernstein. The United States defaulting on its debt would be a “serious breach.” When asked if he feared the worst outcome if Republicans continue to stall the nation’s ability to pay its debt, Bernstein told theGrio, “I am paid to worry.”
The financial conundrum in Washington will have varying impacts on services funded by the federal government. Leon W. Russell, chair of the National Board of the NAACP, told theGrio, that “the potential is severe,” particularly for Black Americans.
“The Black community needs to be concerned about the impact a protracted fight over the debt ceiling could have on interest rates and potentially on social safety net programs,” warned Russell. “For those with credit card and other interest-impacted debt, a default on the national debt could be financially devastating.”
He continued, “If there are forced cuts in social security and Medicaid, people could actually die. So the Black community would probably be negatively impacted more deeply and more quickly than other parts of the population.”
According to Bernstein, raising the debt limit has occurred “78 times in the past.” Most of the debt limit hikes occurred under Republican presidents – 50 times. During Donald Trump’s presidency, the debt ceiling was raised three times with “no conditions” and “no negotiations,” noted the Biden official.
Bernstein says raising the debt limit “is standard operating procedure on debts already made” and emphasizes “this is not about new debt.”
Financial expert Allan Boomer, the managing partner at Momentum Advisors, explains, “Last year’s budget targeted spending of $5.9 trillion, but only $4.8 trillion of income. That means we need to borrow over a trillion dollars each year to continue operating the government.”
Boomer compares the federal government’s need to pay its bills to the average American balancing their checkbook: “In layman’s terms, it’s like earning $48,000 per year but spending $59,000 a year and financing the difference with credit cards.”
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