Social Security payments may be delayed due to debt ceiling impasse


Seniors may soon feel the pain if, for the first time in history, America cannot pay all its bills.

Unless President Joe Biden and House Republicans finalize a deal In order to solve the debt ceiling problem as soon as possible, the Treasury may not have enough funds to fully meet all the country’s obligations June 1 at the earliest.

The first tranche of Social Security payments — worth about $25 billion — is scheduled to go out on June 2. They go primarily to many of the oldest and most vulnerable of the roughly 66 million retirees, disabled workers and others in benefit plans who started receiving checks before May 1997.

Payments to recent registrants will be released on June 14, June 21 and June 28, depending on the month of their birth. The weekly amount is also about $25 billion.

but if debt ceiling Without a resolution to the impasse, those benefits could be delayed, along with federal worker salaries and armypayments to Medicare providers, and federal grants to state and municipal governments for Medicaid, highways, education, and more.

many older people have more and more worriedespecially in the past week or so, as the deadline looms, advocates say.

Nearly two-thirds of beneficiaries rely on Social Security for half their income, and for 40 percent of beneficiaries, Social Security pays at least 90 percent of their income, according to the National Council to Maintain Social Security and Medicare. By 2023, the average monthly benefit for retired workers will be $1,827.

The board’s chief executive, Max Richtman, has been telling members to try and set aside some money as a buffer if their June benefits don’t arrive on time. But that’s not possible for many recipients.

“A lot of people in Washington don’t quite understand what this might mean,” he said. “If you’re dependent on your Social Security for most of your living expenses, you won’t be able to pay your rent, buy food, pay your utilities, your basics … pay for possible out-of-pocket health care bills come over.”

He’s trying to reassure people that they will eventually get full benefits.

Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens, said older Americans are more aware of the debt-ceiling battle — and potential payment delays — this time around thanks to the internet than during the last major standoff in 2011. alliance. Many are worried not only about their benefits, but also that a potential stock market drop triggered by a default could deplete their retirement savings.

“I’m very, very concerned about what this is doing to our financial industry and our interests,” she said.

Social Security beneficiaries may be somewhat shielded from the full impact of U.S. default obligations.Although it is unclear how the Treasury will handle Payment With the money it has on hand, the agency may eventually decide to prioritize Social Security benefits — though likely after it has already paid the interest and principal on the nation’s debt.

Also, the Treasury Department will likely continue to make payments on time thanks to the entitlement program’s trust fund, said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

Since the US receives less revenue than it needs to pay its bills, the Treasury has to borrow to cover all of its obligations.But since the country has been hit $31.4 trillion debt ceilingit cannot increase borrowing until Congress resolves the cap.

On Social Security, the Treasury pays benefits in cash obtained by borrowing from the public. But according to the Congressional Budget Office, those payments reduced the balance of a trust fund made up of national debt. These payments have little net effect on the total amount of debt subject to the limit, due to a reduction in so-called “internal government debt.”

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