U.S. default could cause unemployment surge in Illinois

CHICAGO - House progressives are calling on President Joe Biden to stop negotiating with House Republicans, labeling the GOP as "economic terrorists."

The two sides have been in talks all week on the looming debt ceiling.

The Treasury says the nation won't be able to pay all of its bills in full and on time as soon as June 1st, which is now just a week away.

A prolonged default on America’s debt could result in the loss of nearly eight-million jobs, sending Illinois’ unemployment rate above nine percent, according to economists at Moody’s Analytics.

It's estimated that breaching the debt ceiling for just a few days would throw tens of thousands of Illinois residents out of work.

SUBSCRIBE TO FOX 32 CHICAGO ON YOUTUBE

So far, the debt ceiling crisis has been a Washington problem and a Wall Street problem, but come June first, it could be a worldwide problem. That's when the treasury department says the U.S. could run out of money to pay its bills unless lawmakers raise the debt ceiling.

"I've made clear time and again defaulting on our national debt is not an option," Biden said.

On June first alone, $10 billion in military pay and retirement, $12 billion in veterans payments, and $47 billion in payments to Medicare providers may go unpaid.

Then, on June second, $25 billion in social security benefits are due. Add in the rest of that week and another $8 billion in food assistance, Medicaid and tax relief bills could vanish without an agreement.

"They know how much this is going to harm them. Harm their ability to feed their children, harm their ability to provide childcare to their children, harm their health care, harm our seniors," Rep. Jamaal Bowman (D) said.

House Democrats spent much of Thursday slamming their Republican counterparts, who went ahead with a scheduled recess and headed back to their districts, but top Republican negotiators are continuing to meet with the White House.

"I thought yesterday was a productive day and we still could have more productive day today," House Speaker Kevin McCarthy said.

The details of a potential deal keep changing, but some Republicans have already drawn a red line.

"We gotta take the credit card away from the government," Rep. Ralph Norman (R) said.

The closer the U.S. inches to defaulting, the riskier it is for the nation's perfect credit rating.

Fitch now lists the U.S. as "Rating Watch Negative."