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PORT CHESTER, N.Y. -- With the possibility of the government defaulting on its debt, Toni Ganim has one main concern--her Social Security checks.
"I use (Social Security) for food and bills," said Ganim, 72. "Some seniors really depend on those checks. They would suffer without them."
Democrats and Republicans continue to engage in a stand-off as the Tuesday deadline approaches to raise the debt ceiling. Local officials say if an agreement isnt reached by then, it could mean some dire consequences for local governments and their constituents, though entitlement programs such as Social Security and Medicaid may not be affected.
While its been widely reported that if Tuesdays deadline isnt met, the government will default, thats technically not true, officials say. Default happens when interest on loans is not paid, however officials say there will be enough money from tax revenue to cover those payments.
I agree that the definition of default is more technically detailed than used in common parlance, said Congresswoman Nan Hayworth (R Mount Kisco) of New Yorks 19th district. The treasury will still be able to pay our sovereign debt obligations.
That, Hayworth said, includes treasury bonds, Social Security and Medicare.
Those debt obligations will be taken care of, she said.
Hayworth also noted that while everyone is focused on the Tuesday deadline, she said knowledgeable observers say it could be a few days longer before the impact of the failure to raise the debt ceiling is felt.
However, if those days do pass without any resolution, Hayworth said the local governments and organizations in Westchester will most likely feel the pinch with things such as Community Development Block Grants. She said the treasury department would have to prioritize its payments and items such as Social Security, Medicaid and military paychecks would likely be at the top of the list and not grants.
Some might have to give an IOU to their local contractors if theyre willing to take one, she said.
Congresswoman Nita Lowey (D - Harrison) of New Yorks 18th district said in addition to a possible delay in Social Security benefits and other services, failure to raise the debt ceiling could result in higher interest rates that could impact the cost of mortgages and credit card payments.
Families could lose thousands of dollars from retirement savings and investments, she said. It is clear that Congress and the President must agree to a plan that ends the default crisis and includes responsible spending reductions that do not balance the budget on the backs of the most vulnerable Americans.
New York State Senator Greg Ball (R, C Patterson) said the fallout would be especially trying for the state because he feels New York does not rebound quickly from fiscal crisis.
Historically, New York State takes twice as long to recover from an economic downturn, he said. So, any recovery caused by this would be doubly hard. It would go beyond lost grant money. It would cause a problem balancing the state budget. Its odd that Washington is making Albany look good right now. But all I can say is this would be devastating at both the state and local level.
Ganim's checks may be secure but it doesn't mean she's content.
"Whether it's Democrats or Republicans, they need to be thinking more about taking care of the people and less about fighting with each other," she said.
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