Any American half-watching the news over the past few weeks is bound to know about the debt ceiling crisis facing the United States. In recent weeks, Republicans and Democrats have failed to come to a bipartisan agreement on how to handle the issue.
The United States federal government is expected to hit its debt ceiling, the maximum amount it is allowed to borrow in order to pay its debts, very soon. Exactly what day? Well, no one really knows. According to Treasury Secretary, Timothy Geithner, that date can only be projected based on expected tax receipts, timing of payments, and the amount of cash reserves available.
Some expect that day to be August 2nd. And on the front lines of those worried are the thousands of Social Security recipients who expect checks on August 3rd.
Will Social Security Checks Be Mailed (or Deposited) on Time, August 3rd?
The short answer: no one knows. If the House and Senate can’t manage to pass a bill that either outlines drastic operating budget cuts or finds ways to increase revenues, raises the debt ceiling, or does a combination of those options, the federal government will have some hard choices to make as bills come due. Who will get paid on time, at all, or in part?
Are Social Security recipients more important than veterans? Should Medicaid beneficiaries receive priority over soldiers? Where do the unemployed Americans or those who receive subsidized housing rank in there? And exactly who makes those calls?
These are hard questions Congress must wrestle with as its members squabble over the right action or inaction.
Social Security Checks Aren’t the Only Payments on the Chopping Block
Although Social Security payments are the darling of news coverage related to debt limit talks, Social Security benefits aren’t the only payments on the chopping block. If the debt limit isn’t increased or Congress decides to tackle spending head first, a multitude of government-funded programs, payments, agencies, and benefits could also be affected, including:
- Food Stamps
- Income Tax Refunds
- Infrastructure Projects
- Interest on Debt
- Medicaid
- Medicare
- Military Salaries
- Subsidized Housing
- Tax Credits
- Tuition Assistance
- Unemployment Benefits
The U.S. Departments of Transportation, Energy, and Education would also be affected, as would war efforts and other national security expenditures.
While an analysis of the impact of the debt ceiling options on each and every agency or benefit listed above is outside of the scope of this article, these have been mentioned as a way to show how Social Security beneficiaries are not alone in their worries.
Where to Find More Information on the U.S. Debt Ceiling Issue
The Social Security Administration is characteristically silent on the issue, at least on its website. However, if you would like more information on the debt ceiling, the Treasury Department has created a resource page that begins with a plain-English explanation of the debt ceiling then links to facts sheets and letters to Congress from the Treasury Secretary. It’s not a comprehensive overview of the debate, but it is a good starting place for anyone who needs a primer on the debt ceiling from a seemingly non-partisan viewpoint.
U.S. Department of the Treasury Debt Limit Resource Page
If you want to get directly involved in the debate, consider checking out the White House’s new “office hours” initiative. Various senior staffers are holding Twitter sessions to field questions related to the debt ceiling debate. Visit the White House blog to learn more.
Resources:
How the Debt Ceiling Can Affect Your Credit Card Statement by Tim Chen. Retrieved from Forbes.com on July 30, 2011.
Letter from Timothy Geithner to Harry Reid. Dated April 4, 2011. Retrieved from treasury.gov on July 30, 2011.
What the Government Debt Crisis Means to You by Sara Murray. Retrieved from online.wsj.com on July 30, 2011.
Who Will Uncle Sam Pay if There’s No Debt Deal? by Jane Sasseen. Retrieved from Yahoo! News on July 30, 2011.
Lena Gott - Lena Gott is a Certified Public Accountant who gives practical financial advice to her readers.
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