While federal legislators and President Barack Obama said late Sunday they had reached an agreement to deal with the nation's debt ceiling crisis, a weekend report showed the potential crisis on the local and state level if an agreement didn't take place.
US Sen. Barbara Boxer (D-CA) released a county-by-county report detailing the impact on California of a default on the nation’s debt.
According to the report, California received $345 billion in retirement, disability, Medicare and other federal payments in 2009, with more than $608 million of that coming to Lake County alone.
If the debt ceiling is not raised – as it has been 89 times since 1939 – the revenue coming into the U.S. government will not be enough to cover its obligations, which could put Social Security, Medicare, Medicaid, veterans’ benefits, military payments, student loan payments and many other government services at risk of being disrupted, Boxer's office reported.
“The consequences of a default would be devastating for every American and could lead to lost jobs, higher interest rates and disruptions in military pay, veterans’ benefits and Social Security checks,” Boxer said.
Residents of each of California’s 58 counties as well as state and local governments could be hurt if the federal government is unable to fund these priorities, according to Boxer.
Nationally, the consequences for seniors who rely on Medicare and Social Security, for veterans who receive benefits, for active-duty military and their families, and for state and local governments could be deep and painful in the case of a default, Boxer warned.
Among the potential consequences concerns that more than 54 million Americans’ Social Security benefits are in danger of being disrupted, the benefits of more than 45 million Americans who rely on Medicare would be put in jeopardy, with U.S. Treasury Secretary Tim Geithner warning Senate Majority Leader Harry Reid in a Jan. 6 letter that Medicare benefits payments “would be discontinued, limited, or adversely affected” if Congress failed to raise the debt ceiling.
If the deal isn't finalized, there also could be ramifications for 22.5 million veterans whose benefits could be disrupted, stoppage of payments to more than 204,000 active duty military personnel, an estimated $8.8 billion in unpaid Pell Grants to students and cuts to local and state services, Boxer's office said.
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