Americans could lose $20,000 in retirement savings and private student-loan borrowers could see their payments surge if Republicans don't raise the debt ceiling, a new report says

• The Joint Economic Committee released a report on the consequences of failing to raise the debt ceiling.
• It said Americans could lose $20,000 in retirement savings, and private student-debt loads could surge.
• Republicans have floated a range of spending cuts to raise the debt ceiling that Democrats have rejected.

A new congressional report delves into the catastrophe that would result should Congress fail to raise the debt ceiling.

On Thursday, the Joint Economic Committee (JEC) — a congressional group that reviews economic policy — released a report analyzing the consequences of failing to raise the debt ceiling. Since Republicans took over a majority in the House, they have expressed their intent to use raising the debt ceiling, and keeping the US on top of paying its bills, as leverage to achieve their own priorities, largely in the form of major spending cuts.

With the US expected to run out of extraordinary measures to pay its bills as soon as July, Democratic lawmakers — and President Joe Biden — have been slamming GOP lawmakers for failing to put forth a plan to raise the debt limit and keep the country from default, which would be unprecedented with severe consequences. The JEC report highlighted how Americans could be impacted should the country default for the first time ever this year.

"This report shows that a Republican default crisis means real dollars coming out of American families' wallets and savings decimated. This is not a hypothetical exercise to the millions of Americans - including veterans and seniors - who rely on the United States government for benefits, pensions, and disability," Senate Majority Leader Chuck Schumer said in a statement.

"House Republicans' approach is dangerous and destabilizing," he continued. "Even the threat of a breach will raise costs on everything from car loans to mortgages. Republicans are gambling with Americans' savings, benefits, and lives, all to play a political game."

According to the report, a default would cause a $20,000 loss to Americans' retirement savings, based on think tank Third Way's report on the 2011 debt limit negotiations. Along with that, small business loans could increase $44 a month, a new homeowner could see their monthly mortgage payment increase $150 a month, and private student-loan borrowers could experience a $23 increase to their monthly payments due to interest rates that would surge.

Currently, the Treasury is able to shuffle around spending to afford its obligations, like getting Social Security checks to Americans. But once the US defaults, the government will no longer be able to meet those obligations, meaning interest rates will surge in the financial sector and federal benefits will be withheld.

This is just the latest report highlighting the consequences of a default. Earlier this month, a report from Moody's Analytics found that even if the country does avoid a default, Republicans' proposed spending cuts could trigger "a recession in 2024, costing the economy 2.6 million jobs at the worst of the downturn and pushing unemployment to a peak of near 6%."

That's why Biden and Democratic lawmakers have been insisting that raising the debt ceiling be bipartisan, without any negotiations.

"Instead of making threats about default, which would be catastrophic, let's take that off the table," Biden said during remarks earlier this month. "Let's — as I said at the beginning, let's have a conversation about how to grow the economy, lower costs, and reduce the deficit. I just laid out the bulk of my budget; Republicans in Congress should do the same thing. Then we can sit down and see where we disagree."

Over the past week, the White House has been ramping up its attacks on the conservative House Freedom Caucus over its plan to raise the debt ceiling, but only if Congress passes legislation that block student-debt relief, recoup unspent pandemic funds, and end environmental programs, among other things.

"The Freedom Caucus's devastating cuts to families' budgets and American priorities would not reduce the deficit because they would just go toward paying for MAGA House Republicans' $3 trillion in tax cuts skewed to the wealthy and large corporations," a White House official said in a statement to Insider.