Obama: Debt Ceiling Impasse Threatens Social Security, Veterans, Medicaid Checks

Jul 12, 2011 2:18pm

ABC News’ Devin Dwyer (@devindwyer) reports:  The White House warned today that millions of Americans might not receive federal benefits checks if both sides can’t reach a deal to raise the nation’s debt limit by Aug. 2.

"We cannot guarantee – if there were a default – that any specific bill would be paid,” White House spokesman Jay Carney said, seeking to leverage public pressure on negotiators from both sides who are headed back to the White House this afternoon. 

President Obama also raised the specter of short-changing recipients of federal benefits, telling CBS’s Scott Pelly in an interview that "there may simply not be the money in the coffers to do it.” 

More than 80 million Americans who receive benefits payments from the government each month could be at risk, the Treasury Department said.  Most of those checks cover Social Security recipients, veterans and civil service retirees. 

On Aug. 3, the Treasury is scheduled to make a $23 billion payout of Social Security benefits, a spokeswoman said.  Obama suggested today that payout could be at risk. 

“We no longer have the authority to borrow money if we don’t raise the debt ceiling,” Carney said. “As you know we have obligations that exceed the money we take in.”

Neither the Social Security Administration nor the Treasury Department would comment on the default scenario or how the government would prioritize payments when faced with limited funds.

“That’s the kind of choice nobody want the United States of America to make,” Carney said.  

House Speaker John Boehner later responded to the president's comments on Social Security checks being in jeopardy, saying in an appearance on Fox News, “It’s way too early to make veiled threats like that.”

Boehner also said he believes that the U.S. will find a way not to default on its debts before the Aug. 2 deadline. 

Note: This post was updated from an earlier version to include comment from Speaker Boehner. 

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus