May 23, 2023, 1:10 PMPresident Joe Biden looks on during a meeting with US Speaker of the House Kevin McCarthy in the Oval Office of the White House in Washington, DC, May 9, 2023.If the United States defaults on its financial obligations, millions of Americans might not be able to pay their bills as well.
To cover the difference, the United States Treasury issues debt through securities, according to University of Pennsylvania's Wharton School of Business professor Olivia Mitchell. Backed by the United States, those securities are happily bought by investors who see it as a safe guarantee they'll get paid back with interest.
Beyond not being able to pay interest and principal on government securities -- which economists broadly agree would rattle the stock market and possibly damage the U.S. credit rating -- the Treasury would be unable to issue new debt to cover expenses like Social Security, according to Mitchell.on Social Security in the month of June, according to the Bipartisan Policy Center.
Lynda Fisher, 80, told ABC News that her budget relies on her monthly Social Security check and that a delay would complicate her essential spending, frustrating the 80-year-old who has spent her life contributing to the system.