A new report from the Bipartisan Policy Center found that seniors may be among the first harmed if the debt ceiling isn’t raised. The center studied Treasury Department receipts and expenditures for August 2009 and 2010 and determined that the government likely would not have enough revenue to pay the full $23 billion payment to Social Security recipients due Aug. 3. On that day, according to the analysis, the government would take in about $12 billion in revenue but would owe $32 billion, creating a $20 billion shortfall. It happens to be the first Wednesday of the month — the day a majority of Social Security recipients get their checks.
An immediate 44 percent cut in government spending, which is what would be necessary if the debt ceiling isn’t raised, is going to adversely affect large and important government programs. As the center wrote, if the debt limit isn’t increased, “handling all payments for important and popular programs (e.g., Social Security, Medicare, Medicaid, Defense, active-duty pay) will quickly become impossible.” At the moment, the GOP has blown up negotiations over raising the debt ceiling in order to protect the rich and oil companies from tax increases, and to preserve corporate tax accounting gimmicks.