Still no agreement as of Friday afternoon with the federal government racing toward a partial shutdown when funding is set to expire at midnight on Saturday, meaning hundreds of thousands of government workers would be furloughed if Congress does not pass a short-term spending bill before the deadline.
While the House voted on Friday to advance a rule to begin debate on a stopgap spending bill that would be keep the government open for 30 days as the House continues to try to pass individual spending bills to keep the government open, the bill has little chance of passing the Senate as it includes many provisions Democrats who control the Senate and some Republicans find objectionable.
While a partial shutdown would impact many federal employees including members of the military and air traffic controllers who would serve without pay and could lead to long TSA lines, it would also shut down many national parks. But notably, this shutdown would NOT impact Social Security and Medicare benefits.
The holdup is largely due to a small group of hard right-wing House Republicans who have vowed to vote against any temporary funding measure, who are demanding further spending cuts and immigration-related legislation.
“Small minorities in Congress are impeding the basic duty of Congress to fund the federal government, threatening an unnecessary and irresponsible government shutdown. It is past time for the House majority to ignore the unappeasable few within its caucus and work across the aisle toward a bipartisan agreement that serves the American people,” said William Shackelford, president of the National Active and Retired Federal Employees Association (NARFE) in a Sept. 28 statement. “If Congress does not fund the government, millions of federal employees could go without pay, agency missions will be hamstrung, and every American will suffer the consequences because lawmakers couldn’t agree to a simple continuing resolution.”
Federal agencies began notifying employees yesterday to begin preparing for a government shutdown, as the impasse in Congress over spending bills continued. The new fiscal year begins Oct. 1, and absent statutorily required funding legislation, nonessential federal government services will be suspended beginning Monday.
The Senate advanced a bipartisan short-term funding bill, which may be passed at the earliest Sunday, but embattled House Speaker Kevin McCarthy (R-CA) said he won’t bring the Senate bill up for a vote in the House. Unlike thousands of federal employees, members of Congress would still be paid if this shutdown happens.
Should the federal government shut down, it would be the 22nd time since 1976.
Even if the partial shutdown occurs, Social Security benefits will still be paid because they are mandatory spending and because the money comes from a trust fund.
“The bottom line is Social Security payments still go out even during a government shutdown,” Jason Fichtner, chief economist at the Bipartisan Policy Center and former acting deputy commissioner at the Social Security Administration, told CNN this week.
As of August 2023, approximately 66.7 million Americans were receiving Social Security checks with an average monthly benefit of $1,706, according to the Social Security Administration. Nearly two-thirds of beneficiaries rely on Social Security for at least half of their income, and for 40% of recipients, the payments comprise at least 90% of their monthly income, according to the National Committee to Preserve Social Security and Medicare.
Social Security’s field offices and call center would also remain open in the event of a partial government shutdown.
“We will continue activities critical to our direct-service operations and those needed to ensure accurate and timely payment of benefits,” the agency said in its government shutdown contingency plan from mid-August. “We will cease activities not directly related to the accurate and timely payment of benefits or not critical to our direct-service operations.”
Overall, the Social Security Administration would furlough only about 8,500 of its nearly 62,000 workers, according to the contingency plan. More would be furloughed if the shutdown drags on.
Social Security payments were in jeopardy this spring during the debt ceiling showdown, which would have resulted in delays in payments, but the crisis was averted just four days before a default when Congress and the Biden Administration reached a deal to raise the debt ceiling.
That bipartisan agreement essentially left Social Security and Medicare as is, and did not include any reforms to improve the solvency of Social Security.
SEE ALSO:
• Senate Sends Debt Ceiling Bill to Biden, Averting Potential Default
• Dems Reintroduce Bill to Shield Social Security Payments from Garnishment
• Final 2024 Social Security COLA Estimate Before the Real Thing: 3.2%
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
