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Continued: Social Security checks hang in the lurch

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

Low-income retirees are concerned about the government shutdown for a series of reasons, but they don’t believe Congress will let the nation default or fail to meet its obligations to those collecting Social Security.

“They say, ‘Oh, they’ll work it out. They like to push it up to the last minute,’ ” Taylor said.

She said social workers should be able to rise to the occasion if Social Security checks are delayed or benefits cut, by finding emergency help with living expenses and energy costs.

“We believe that by working together with our partners we can put that safety net in place for a while,” Taylor said.

But the threats to Social Security that seniors feel go beyond the worst-case scenario of late payments or a government default as a result of inaction in Washington on the debt ceiling.

Reduced cost of living increases may be on the federal docket before the end of the year. Those annual increases to Social Security benefits are now tied to the Consumer Price Index, but some, including President Obama, would like to tie them to a “chained” CPI, which takes into account the fact that consumers substitute lower-priced goods as prices rise.

The AARP opposes this, as does Bob Geyen, who says it reduces benefits as people get older. “They’ve had chances to make adjustments to this for several years and they’ve failed to do it,” Geyen said. “That’s the moral outrage to this thing, that it could have been much different than it is.”

The more immediate possibility of a default would have implications for seniors beyond Social Security benefits.

“The public will react to Social Security benefits not being paid, but there’s a larger amount of Medicare and Medicaid benefits,” Kiedrowski said. “So are you not going to pay the hospitals and not going to pay the doctors?”

Since the government shutdown, Social Security, Medicare and Medicaid have continued to make payments without delay. That would change if Congress doesn’t raise the debt ceiling, but no one’s sure exactly how it would work out.

“One of the key things is this is uncharted territory,” Van de Water said. “We hope that we never have to find out how any of this works.”

Adam Belz • 612-673-4405 • Twitter: @adambelz

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