Anxious retirees, social service groups among which make predetermined contingency plans

WASHINGTON — Phoenix retiree Saundra Cole has been watching the news about the debt limit negotiations in Washington with dismay, and limiting her use of air conditioning to save money in case her monthly Social Security check is late due to to a breach.

For her, air conditioning is no small feat in a city where the average daily high hits 94 degrees in May. If the government can’t meet her obligations, she says, she “would be devastated.”

“What worries me is the food banks and the electricity here because, you know, we’ve had elderly deaths due to the heat,” Cole says.

Politicians in Washington may be offering assurances that the government will find a way to avoid default, but across the country, economic anxiety is mounting and some people are already adjusting their routines.

Government recipients, social service groups receiving state and federal subsidies, and millions more across the country are contemplating massive and immediate cuts if the US defaults on its financial obligations.

Treasury Secretary Janet Yellen warned last week that a default would destroy jobs and businesses, and leave millions of families dependent on federal government payments “likely without pay,” including Social Security recipients, veterans and military families.

“A default could cause widespread suffering as Americans lose the income they need to survive,” he said.

The number of people potentially affected is enormous. According to the Census Bureau, in 2020, approximately 35% of American households included someone receiving Social Security benefits, 36% received Medicaid benefits, and more than 13% of the total population received food stamps.

A recent poll by The Associated Press-NORC Center for Public Affairs Research found that 66% of Americans said they are very or extremely concerned about the impact on the US economy. % said they are following the debate closely.

Robert Gault, 63, who relies on a $1,900 monthly Social Security disability payment, says a financial default “would make life terribly difficult for me.” The long-time former factory worker said he suffers from chronic back pain caused by degenerating discs in the spine.

Gault, who lives in Bradford, Pennsylvania, near that state’s border with New York, said he thinks a lot about the debate — and the impasse — in Washington.

She hasn’t made any drastic changes to her lifestyle, but she said, “I’m more aware of everything and think about everything I do now.”

Negotiations between the president and congressional leaders are on edge as they try to break a deadlock. Republican lawmakers have been pushing for spending cuts in exchange for agreeing to increase the government’s borrowing authority and President Joe Biden wanted a “clean” debt ceiling increase with no strings attached.

Without a deal, the US could stop paying as soon as June 1, according to Yellen.

House Speaker Kevin McCarthy, R-Calif., was asked Monday if people should start preparing for default and insisted “no, no, no, no.”

But people on fixed incomes and organizations serving the poor, already feeling the side effects of the pandemic and dealing with inflation, are bracing for a possible debt default that would deal a crushing blow to their finances.

Clare Higgins, executive director of Community Action Pioneer Valley in Massachusetts, said demand at the organization’s food banks has skyrocketed since the start of the pandemic and is growing again.

With a potential debt default, he said, he’s seeing increased demand for food from the three pantries the organization runs or financially supports.

“Yes, the demand has increased, but it was already there before,” he said.

“We are already behind in what we can pay teachers,” he said of the organization’s Head Start and early learning programs. “And the inflation that has occurred in the economy has already reduced our ability to stretch the dollar.”