There's a lot on the line in the showdown over raising the federal debt ceiling - including, President Barack Obama says, retirement and disability benefits for millions of Americans.
The nation's economic situation could go from bad to worse if Congress fails to increase the government's borrowing authority by the Oct. 17 deadline, according to Obama.
"In a government shutdown, Social Security checks still go out on time; in an economic shutdown - if we don't raise the debt ceiling - they don't go out on time," Obama said during a speech at a construction company in Rockville, Md. "In a government shutdown, disability benefits still arrive on time; in an economic shutdown, they don't."
Get great discounts on financial products and services with your AARP Member Advantages.
The president's remarks came almost immediately on the heels of a report from the Treasury Department that warned of catastrophic economic consequences should Congress fail to raise the debt ceiling, including "a recession more severe than any seen since the Great Depression."
More than 57 million Americans receive monthly benefits from the Social Security Administration, including some 46 million retirees, spouses and survivors. The average monthly retirement benefit is $1,225.
Any interruption in the flow of benefits would be bad news for the 22 million Americans that Social Security kept out of poverty last year, including 15 million adults 65 and older. And it could send shock waves through the nation's economy.
A new report from AARP, in fact, shows that every $1 paid out by Social Security generates, in turn, about $2 of total output for the U.S. economy - or nearly $1.4 trillion in 2012.
Discussion: Will social security be the next hostage?
"Since we've never had a default, it's unclear what would happen with Social Security - and all payments," says David Certner, AARP's legislative policy director. "But while there may be disagreement over many policies, there should be no disagreement that Social Security benefits must be paid."
Republican lawmakers on Capitol Hill have said they plan to use the debt-ceiling issue to extract concessions from Democrats on spending cuts. Obama has said he won't negotiate over raising the debt ceiling, calling it Congress' responsibility.
Social Security has never missed a payment, but that doesn't mean it's impossible. When Congress threatened to let the Treasury default in 2011, AARP sent Obama a letter insisting that Social Security payments should "continue to be made regardless of congressional action to raise the debt ceiling."
Also of Interest
- Social Security's One-Two Punch
- Beware of the Latest Health Law Cons
- Shopping for health insurance? The health insurance marketplace is now open
- Join AARP: Savings, resources and news for your well-being
See the AARP home page for deals, savings tips, trivia and more