LEOMINSTER — With two days to spare, President Joe Biden signed a bill to suspend the nation’s $31.4 trillion debt ceiling through Jan. 1, 2025 on Saturday.
As it looked like a deal may not be reached, Americans grew anxious of what a default on the national debt could mean.
The national debt ceiling is a fixed number of allowed money to be borrowed by the United States government to cover its spending and debt. Even with the bill signed, many are concerned about the growing amount of money the country owes. Defaulting would have meant that the country would have been unable to pay its bills.
“Most of the federal budget is devoted to mandatory spending on social insurance programs such as income security, healthcare and social security.” said Christa Marr, a professor of Economics at Fitchburg State University.
Millions of Americans are reliant on federally funded programs like Social Security. If the nation were to default, economists believe that the first people to feel the effects would be federal employees and those reliant on federally funded programs and benefits.
“Many Americans rely on payments from these programs in order to afford basic necessities like food and housing.” Marr said.
Although Sens. Elizabeth Warren and Ed Markey voted no on the compromise bill struck between Biden and House Speaker Kevin McCarthy, U.S. Rep. Lori Trahan was among those to support the bill’s passage.
“This compromise bill helped protect [federally funded] programs,” Trahan said, discussing social security, medicaid and disability income programs.
To put the impact of a default in perspective, Trahan’s office said the impact could have seen 73,000 jobs lost, put 823,000 families on social security at risk, jeopardized healthcare benefits for 2.3 millions residents which includes Medicare, Medicaid and Veterans Affairs, increased lifetime mortgage costs by $90,000, raised the costs of new car loans by $800, threatened retirement savings of 962,000 residents by eliminating $20,000 from the typical retirement portfolio.
Not would this have affected income for millions of Americans but also communities. Local projects are often funded at the federal level, such as the Theater Block in Fitchburg. However, Trahan assured that projects such as these are not in immediate detriment and “will be dealt with in the appropriations process.”
“While I do disagree with some of the provisions in this compromise bill, it is far from where we began.” Trahan said, “This deal fulfilled our obligation to the United States, which is why I voted yes.”