Sen. Schumer calls on Congress to avoid default
U.S. Sen. Charles Schumer is calling on Congress to work together to pay off America’s debts and to avoid the risk of America landing in a default.
In a virtual press conference on Wednesday morning, Schumer discussed how the risk of a default will be devastating to the average Upstate family, affecting things such as credit cards, interest rates, home values, social security and Medicare.
“If we don’t pay our debts the consequences of default are going to be an economic nightmare for Upstate New York families,” Schumer said. “Right now because of a few fringe extreme MAGA wings in the house Republican party — and that doesn’t represent all or even the majority of Republicans in the state or even the house — we are at risk of a default by the United States government. It has never happened before in our history.”
Schumer said that in the past Democrats and Republicans have always come together to get the debts paid, because they knew that the consequences of a default would be severe. He added that right now the extreme right wing MAGA Republicans are the ones that are threatening a default.
Rather than being an abstract concept, Schumer said people need to pay attention to what is happening because it will mean real dollars out of the pockets of families in the state.
“Mortgages, car loans, credit card rates will all go up,” Schumer said. “A default could surge new mortgage rates to over 8%. The average cost of a car in Albany is $33,000. A default would cause a spike in borrowing costs as interest rates skyrocket, adding $3,000 to the financing of the cost of the car.”
Schumer said this applies across the board to all upstate cities. Additionally, he said retirement savings could lose billions, and that home values will decline, following the line of mortgages going up. He gave examples of prices of homes in Upstate cities, including Rochester and Buffalo.
“As we get closer and closer to the day that we have to act, Upstate New York families will see this,” Schumer said. “We have to, I think it’s our obligation, to let people know how bad this is so they can tell their Congress members, Democrat and Republican, to avoid default at all costs.”
Schumer asked Congress to stop doing brinkmanship and hostage taking — which is what is currently happening — and instead focus on getting the job of paying America’s debts done, as has happened under both Democratic and Republican administrations in the past.
Another big item that will be affected by a default is Social Security — 1.8 million Upstate New Yorkers rely on that income, according to Schumer, who get about $3 billion in critical funds each month. Almost one in five New Yorkers receive Social Security benefits. These monthly checks will be disrupted by a default. This includes close to 320,000 people at risk for having their social security disrupted in Western New York.
Schumer also called social security a bedrock for seniors, saying this will affect them most. “One in four seniors rely on social security for 90% of their income,” Schumer said. “So, Congress shouldn’t be playing games with default as it directly affects social security.”
A default is also a threat to health and Medicare payments for 3.7 million New Yorkers. This could also lead to finances being interrupted for local hospitals, leading to severe financial distress and bankruptcy. Schumer added that in many places in Upstate NY, hospitals are the largest employers and this will lead to many people losing their jobs.
Veterans and the military will also get their funds slashed, along with the SNAP program, or food stamps. “All of these and many more will happen if we default,” Schumer said. “So when we call default an economic nightmare for Upstate New York, we’re not exaggerating one bit. Real lives, real people, those are the people who will get hit the hardest. The ultra wealthy, they will be able to afford all this. The average family, no way, not even lose. So, we have to make sure that playing games with the debt seal, saying that you are not going to do the debt seal if A,B,C,D happens, which risks us defaulting, is just too risky a game to play with the consequences for each American.”
Schumer emphasized again that Democrats and Republicans have always been able to come together, no matter who was president, and that this new part of the Republican party is who is currently trying to run the show. “It has to stop,” he said.