Politicians, including President Obama have warned that should the budget impasse trigger a government shutdown on September 30, Social Security checks would stop. Is that the truth, an empty political threat, or something in between?
In a press conference on Feb. 15, 2011, the last time we came this close to government shutdown, President Obama warned, "I think people should be careful about being too loose in terms of talking about a government shutdown, because this has -- this is not an abstraction. People don't get their Social Security checks."
In that statement, it seems President Obama himself may have been speaking a bit loosely.
As pointed out in a recent report from the nonpartisan Congressional Research Service, government shutdowns are triggered by Article I, Sec. 9 of the Constitution and the Antideficiency Act, both of which prohibit the federal government agencies from spending money before and unless Congress has enacted appropriations bills authorizing the expenditures.
But the Antideficiency Act does not apply to Social Security benefits.
Money to pay Social Security benefits is not appropriated as part of the annual federal budget process. As a mandatory expenditure supported by trust funds, payment of Social Security benefits is not subject to the restrictions of the Antideficiency Act.
However, the Socials Security Administration employees who process those benefit checks are paid through annually appropriated funds and, under the Antideficiency Act, could be barred from going to work during a government shutdown. So, while the money to pay the benefits would still be there, Social Security could end up without enough employees to send out the checks during a shutdown. But that has never happened and probably never will.
Under opinions issued in 1980 and 1981 by the U.S. attorney general, the federal agencies have limited rights to retain enough workers to carry out certain necessary functions during a shutdown.
For example, Social Security's official history website shows that during the four-day government shutdown in 1995, the agency initially furloughed 61,415 employees on the first day, leaving only 4,780 employees at work. But on the second day of the shutdown, after stating that the furloughs had "significantly impacted the Agency's service to the public," Social Security was allows to recall additional employees to work.
During the second 1995 shutdown, which lasted three weeks, 55,000 Social Security employees remained at work and checks went out as usual.
Also keep in mind that in 1995, most Social Security benefit checks were still mailed to recipients. Today, most benefits are processed electronically through direct deposit, thus requiring fewer employees.
But does the past ensure the future? Does that fact that past shutdowns have not slowed or stopped Social Security checks mean the next one won't?
While taxes may be the only "sure thing" in government; history, laws and politics suggest that Congress and President Obama will probably manage to avoid the fast-approaching shutdown, but even if they don't, Social Security benefits will be paid as usual.
While all of the above can also be said for Medicare and Medicaid reimbursements, active duty military personnel would probably see their paychecks delayed during a long-lasting shutdown. Military pay, as an expenditure authorized annually be appropriations legislation is subject to the restrictions of the Antideficiency Act.