New report explains step-by-step how a federal default could unfold — and why Social Security beneficiaries could be among the first Americans affected

WASHINGTON, Sept. 18, 2026 /PRNewswire/ -- The National Seniors Policy Center (NSPC) today released a new report by President Daniel Perrin, The National Seniors Policy Center is Not Crying Wolf – Default Explained, Step-by-Step — and The Day After, warning that rising federal interest costs and growing pressure in the U.S. Treasury market are creating risks Congress can no longer afford to ignore.

The report highlights a striking measure of the nation's fiscal position: roughly 67 cents of every new dollar the federal government borrows now goes toward paying interest on debt it already owes, up from approximately 40 cents in 2023. Gross federal interest expense is on track to reach approximately $1.4 trillion in fiscal year 2026.

"We are increasingly borrowing new money simply to pay the cost of money we have already borrowed," said Daniel Perrin, President of the National Seniors Policy Center. "That cycle compounds on itself, and the longer Congress waits to address it, the more difficult and costly it becomes to change course."

NSPC's report explains step-by-step how a U.S. default could develop, examining Treasury auctions, primary dealers, rising refinancing costs and what could happen if investors continue demanding higher yields to hold U.S. debt. It warns that a crisis may not begin with a visibly failed Treasury auction, but instead emerge through rising yields and weakening demand for Treasury securities.

Of particular concern to NSPC is the potential impact on Social Security beneficiaries. Federal law requires Social Security trust fund surpluses to be invested in special-issue U.S. Treasury securities. The report warns that a Treasury unable to meet its obligations could threaten the redemption of those securities and disrupt benefit payments.

The report comes as the Debt Default Clock remains at two minutes to midnight, the closest it has stood in its history. NSPC argues that Congress ultimately holds the authority needed to address the underlying borrowing problem.

"The purpose of this report is not simply to sound an alarm," Perrin said. "It is to show exactly how the mechanics of a debt crisis could unfold, who would be affected, and why Congress still has an opportunity to prevent it."

Read the full report:  https://nspc.org/default-explained-report

Media inquiries and interview requests for National Seniors Policy Center President Daniel Perrin should be directed to Jill Sutherland at 422980@email4pr.com or 316-299-8469.

View original content to download multimedia:https://www.prnewswire.com/news-releases/national-seniors-policy-center-warns-us-debt-crisis-is-entering-a-dangerous-new-stage-302882730.html

SOURCE National Seniors Policy Center