US debt default: five ways it would affect you

The United States will almost certainly not default on Oct. 17. Although the federal government will have run out of authority to borrow more money, the US Treasury will have roughly $30 billion on hand to pay its bills for the next several days and, if it chooses to delay some payments, a few days more. But somewhere between Oct. 22 and Nov. 1, it will have to make hard choices about who to pay and who not to pay, according to the Bipartisan Policy Center, a nonprofit think tank in Washington. Here's how default and even the threat of default could affect you as a retiree, consumer, investor, and so on:

1. Retirees: delayed Social Security payments

Matt Rourke/AP/File
Demonstrators in Philadelphia form a symbolic chain in July to protest a proposed change in the formula for determining cost-of-living increases in Social Security benefits. Social Security payments equal 5 percent of the national economy, so a stoppage of payments or even a delay would ripple through the economy.

More than 60 million Americans collect Social Security payments and Social Security income checks, which are staggered through the month, depending on the recipients' birthdays. Once US borrowing authority expires on Oct. 17, the first payments – some $12 billion – go out to recipients on Oct. 23. The Treasury has some $30 billion on hand to cover that, but after that it becomes dicey.

The next payments – some $25 billion – are supposed to go out Nov. 1, according to the Bipartisan Policy Center. The same day, another $3 billion is due from another Social Security program, Supplemental Security Income, which supports disabled adults and children with limited income.

With such a large number of Americans receiving those checks, not paying them would have huge implications politically and also economically. In the previous fiscal year, Social Security payments equaled 5 percent of gross domestic product, a measure of US output of goods and services, according to the National Academy of Social Insurance reports

Even delaying the payments would have implications for many of the 40 million seniors who receive Social Security benefits.

“I have a lot of seniors who are collecting Social Security and are also getting the maximum allowance in SNAP [Supplemental Nutrition Assistance Program, or food stamps] benefits," says Kathy Laffer, a social worker who works with 100 such recipients every month through the local Department of Senior Services of Newton, Mass., a Boston suburb. "If they take a hit on both Social Security and food stamps, they will be left with some very difficult choices.”

Ms. Laffer worries that seniors may be unable to make their mortgage payments on time, which would mean penalties that would further crimp their fixed income. For renters, the stakes would be even higher. “Late payment could potentially expose somebody to being evicted,” she says.

The same problems are already affecting the majority of federal employees, who have been without pay since the government shutdown Oct. 1, and could soon hit veterans and military families. On Nov. 1, some $12 billion is due to go out to active and retired military personnel, as well as veterans.

1 of 5

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

You've read  of  free articles. Subscribe to continue.