Social Security checks hang in the lurch

  • Article by: ADAM BELZ , Star Tribune
  • Updated: October 15, 2013 - 9:04 PM

Lack of a debt ceiling deal could cause delays for millions of seniors.

Failure in Washington to reach a deal on the debt ceiling would force millions of senior citizens to contemplate a harsh new reality: Social Security checks not arriving on time.

And the longer the U.S. government is unable to borrow, the later those checks will be.

“I paid in for 53 years, and I saw that as insurance for when I had to use it,” said Bob Geyen, 68, a retired teacher and school administrator from Shakopee. “It’s just senseless what they’re doing.”

The U.S. Treasury has two big Social Security benefits payments due in the next three weeks — $12 billion on Oct. 23 and $25 billion on Nov. 1.

But if Congress and the White House cannot reach an agreement to raise the debt ceiling, the government will start running short of cash to pay its bills.

“They’ll be short about a third of the dollars that they need to fund the federal government ongoing,” said Jay Kiedrowski, a professor at the University of Minnesota’s Humphrey School of Public Affairs.

The Treasury Department has argued for weeks that for technical and logistical reasons, it cannot pick and choose which bills to pay, since its cash flow varies each day.

It may be able to prioritize payments on the nation’s debt to avoid a default, but all other bills would simply be delayed, said Paul Van de Water, a fellow at the Center on Budget and Policy Priorities.

“If the debt ceiling were not increased, those delays would get continually longer and longer, so that eventually you’d be running a month or two months behind,” Van de Water said.

Social Security benefits, Medicare and Medicaid reimbursements, and federal employee retirement benefits are among the payments expected to be delayed if the gridlock in Washington continues into next week and beyond. Groups that represent older Americans are mobilizing.

The AARP sent a letter to President Obama on Monday, urging him to push for a quick resolution with Congress, because millions of older Americans rely heavily “or even completely” on Social Security and Medicare.

“It’s being taken very seriously,” said Amy McDonough, who tracks federal affairs for the Minnesota chapter of the AARP. “We’re very concerned about what happens, during a default, to critical benefits.”

Half of Americans on Social Security depend on it for 90 percent of their income, McDonough said, and the AARP is asking the president to make Social Security the top priority if Thursday’s debt ceiling deadline passes and the Treasury Department is able to choose which bills to pay.

“They’re not good choices,” she said. “But for lots of people it is a matter of daily living.”

Chuck Radke, 72, of Minnetrista, said it’s getting difficult to figure out what’s real and what’s not. He assumes that delayed Social Security checks are unlikely, and he thinks politicians and the news media are playing games.

“At this point I don’t think they will,” Radke said. “But I guess anything’s possible, and I’ve learned to work with the cards I’ve been dealt.”

Deb Taylor, CEO of Senior Community Services, which serves more than 20,000 elderly people statewide, said that those her organization serves have been surprisingly unconcerned about the debt ceiling debate.

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