Local, national impacts if debt ceiling agreement not reached

WASHINGTON D.C. — The White House and Congress have not agreed to raise the debt ceiling.

The deadline for reaching an agreement is June 1. That is when U.S. Government could run out of money and if that happens, officials would be unable to pay the bills.

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What does that really mean?

News Center 7′s Xavier Hershovitz says a lot of government programs could be impacted if a deal is not reached soon.

The country has gone through government shutdowns where federal workers are either furloughed or unpaid, but a potential default would have a bigger impact.

Hershovitz says this includes the following:

• Federal workers may go unpaid
• Medicare & Medicaid could be disrupted
• Social Security recipients might not get their checks on time
• Interest rates could surge

The uncertainty of it all could have the biggest impact on the overall economy because this has never happened before.

“The possibility of catastrophe is hanging there, in large part because we don’t really know what it will look like,” said Dan Birdsong, lecturer at the University of Dayton. “So, there’s the unknown I think, that is part of the problem.”

>>Debt ceiling explained: Why it’s a struggle in Washington and how the impasse could end

Hershovitz says there is still a lot of uncertainty about what a potential default would mean for the Miami Valley.

Wright-Patterson Air Force Base is a major economic driver for the Miami Valley. The Dayton region’s military and federal installations generate $40 billion in economic impact, according to an analysis by the Dayton Development Coalition.

Wright-Patterson Air Force Base also does the following economically for the region:

• Create 380,000 jobs.
• Account for 6% of Ohio’s economy.
• Generate $69 billion in total economic activity across the state.

Hershovitz says all of this could be impacted by a potential default.

>>Debt ceiling explained: Why it’s a struggle in Washington and how the impasse could end

Birdsong said the economic impacts of a potential default are a reason for concern but that isn’t the only reason.

“I think people should be concerned,” he told Hershovitz. “Mainly because we want a government that functions properly. And it’s moments like this where it just pushes it to this. Its limits on to what degree can the two major parties function properly together just on governing,”

The U.S. House of Representatives is expected to go on recess for the Memorial Day holiday on Thursday.

House Leadership said they will only come back if a deal is reached.

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