Biden criticizes GOP lawmakers for debt ceiling ‘dangerous’ inaction, warns of interest rate hikes

Washington lawmakers are working to pass a suspension of the debt ceiling before government funding runs out, which could happen as early as Oct. 18, according to Treasury estimates. (iStock)

As the federal government moves closer to defaulting on financial obligations for the first time in history, President Joe Biden condemned Republicans for refusing to raise the debt ceiling and “playing Russian roulette with the US economy “during a White House speech Monday. .

“Not only are Republicans refusing to do their job, they are threatening to use power – their power to stop us from doing our job: saving the economy from a catastrophic event,” Biden said. “I think, quite frankly, this is hypocritical, dangerous and shameful.”

Legislation surrounding the federal debt limit has gained bipartisan support in recent years – it has been raised three times under the Trump administration. But this time, GOP lawmakers said they would not vote to raise the debt ceiling. Senatorial Minority Leader Mitch McConnell (R-Ky.) Wrote to the President that “since your party wishes to govern alone, it must also manage the debt limit on its own”.

Failure to raise or suspend the debt limit could jeopardize federal payments, Biden warned, including Social Security checks, military personnel salaries, and veterans’ benefits. A default could also permanently damage U.S. credit, causing interest rates on mortgages, auto loans and credit cards to rise, he added.

In the days to come, even before the default date, people may see the value of their retirement accounts decline. They may see interest rates rise, which will ultimately increase their mortgage and auto payments.

– President Biden

THE SENATE BLOCKS THE BILL TO AVOID THE CLOSURE OF THE GOVERNMENT WHICH COULD DELAY SOCIAL SECURITY AND MEDICINE BENEFITS

Congress has until Oct. 18 to find a solution to settle the debt ceiling before the government defaults, according to Treasury Secretary Janet Yellen. The Treasury Department has taken “extraordinary steps” to maintain government funding since the previous suspension of the debt ceiling expired in late July, Yellen said.

If you’re relying on federal payments like Social Security or Veterans Benefits, keep reading to find out how you can manage your finances in the event of a government default. You can compare a range of financial products in Credible’s online marketplace without affecting your credit score.

BIDEN FACING RENEWED DEMOCRAT PRESSURE TO CANCEL $ 50,000 IN FEDERAL STUDENT LOAN DEBT

How to get extra money if you rely on federal benefits

Federal payments, including government salaries and Social Security payments, are at stake as lawmakers struggle to reach a debt limit deal. If you are relying on federal payments to make ends meet, you may want to consider your borrowing options to avoid defaulting on your personal financial obligations.

FAILURE TO RAISE THE DEBT CEILING MAY LEAD TO INCREASED MORTGAGE RATES, ACCORDING TO THE REPORT

Leverage your home equity

Mortgage refinancing can offer you better terms, such as a lower mortgage rate, but it can also allow you to tap into your home’s equity in the form of cash.

Withdrawal mortgage refinancing involves taking out a higher mortgage than what you currently owe on your home loan, so you can pocket the difference as a lump sum. The amount you can borrow depends on the appraised value of your home – and thanks to record home values, it’s higher than ever.

Keep in mind that mortgage refinancing also comes with closing costs, which are typically around 2% to 6% of the total loan amount. You can use a mortgage payment calculator to see the total cost of refinancing a larger loan.

Mortgage rates are currently near all-time lows, according to Freddie Mac, but that could change if the government defaults on debt later this month. This means that now is the time to lock in a favorable mortgage refinance offer.

You can compare rates without affecting your credit score on Credible so you can decide if withdrawal refinancing is right for you.

MILLIONS OF AMERICANS FEAR MISSING DEBT PAYMENT, NY FED REPORTS

Reduce your debt repayments with refinancing

You can refinance just about any type of loan, including home loans and student loans. And because interest rates are historically low for a range of financial products, refinancing can help you lower your monthly payments as well as save money on interest over time.

Student loan borrowers who refinanced to a longer-term loan were able to reduce their monthly payments by more than $ 250 on average, according to an analysis by Credible. With mortgage refinancing, you may also be able to lower your mortgage payments.

You can compare interest rates on a variety of financial products – including student loan refinancing and mortgage refinancing – in Credible’s online marketplace.

BIDEN ADMIN REVERSES DONALD TRUMP-ERA STUDENT LOAN POLICY LIMITATION POLICY STATE MONITORING

Borrow an unsecured personal loan

Personal loans are lump sum loans that don’t require you to borrow against an asset like your home. They are paid off in fixed monthly installments, which can make them a more predictable alternative to credit card debt.

In addition, the interest rates for personal loans are generally lower than the interest rates for credit cards. The average rate on a two-year personal loan was 9.58% in the second quarter of 2021, according to the Federal Reserve, compared to 16.30% for credit card accounts rated at interest.

You can compare personal loan interest rates for free on Credible. You can also use Credible’s personal loan repayment calculator to determine if this borrowing option fits into your monthly budget.

CHUCK SCHUMER, CHIEF OF THE SENATE MAJORITY

Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.

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