“A lot of people in Washington are not that in tune with what this could mean,” he said. But that’s not possible for many recipients. Max Richtman, the committee’s CEO, has been telling members to try to set aside some money to have a little cushion if their June benefits don’t arrive on time. The average benefit for retired workers is $1,827 a month in 2023. Many senior citizens are already growing worried, especially in the past week or so as the deadline grows closer, advocates say.Īlmost two-thirds of beneficiaries rely on Social Security for half of their income, and for 40% of recipients, the payments constitute at least 90% of their income, according to the National Committee to Preserve Social Security and Medicare. Here’s how we know a US default would be an economic disasterīut if the debt ceiling impasse is not resolved, those benefits could be delayed, along with paychecks to federal workers and the military, payments to Medicare providers, and federal grants to states and municipalities for Medicaid, highways, education and more.If US defaults on its debt, Treasury would have to decide how to pay the bills.How the 14th Amendment factors into the debt ceiling debate.Five ways a debt default could affect you.Fewer commuters depresses occupancy levels in office buildings, and also affects traffic for commercial sites such as shopping malls and entertainment venues, making them less profitable bets for investors.Ī painful mix of downward pressure on asset prices, higher borrowing costs, and tighter lending by regional banks is especially bad news for the commercial real estate industry, which is heavily reliant on debt financing from smaller lenders.

The shift to remote working since the pandemic also poses a threat to commercial real estate values. They may also be more wary of lending given the prospect of a recession, pressure on their asset portfolios, and the increased risk of loan defaults when rates are higher. Moreover, after mass withdrawals of customer deposits caused major problems at several banks this year, smaller lenders are pulling back in fear of further bank runs, raising the prospect of a credit crunch. Steeper rates also erode the relative appeal of real estate to investors because they boost the yields from bonds and savings accounts.

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