Obama Warns August Social Security Checks May Be Withheld if No Debt Ceiling Deal Reached

August 26,2008
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While our elected officials in D.C. fritter away the summer days with partisan handwringing and political point scoring, the clock continues to tick on the deadline for Congress to do something about the federal debt ceiling. Without a deal, the 27 million Americans who depend on

Social Security benefits

could be left in financial limbo.

On Monday, President Obama warned that if a deal can’t be reached to raise the debt ceiling – the legally imposed limit on money that the U.S. government can borrow, which the feds expect to hit by August 2 – he “cannot guarantee” that the 27 million Social Security payments due out on August 3rd will be made as scheduled.

In an interview with the CBS Evening News’ Scott Pelley, the President said “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”

As we’ve

previously noted, the debt limit debate has been the talk of Washington this summer, despite little progress. As

CBS News explains

[u]ntil 1917, Congress had to pass a new law every time the government wanted to borrow money. But with America needing to finance its involvement in World War I, lawmakers passed a law to give the Treasury Department leeway to borrow on its own – so long as it didn’t exceed a certain amount. That’s the debt limit, or debt ceiling – the amount that Treasury can borrow without going back to Congress for permission. Since America has made a habit of spending more money than it takes in, that limit has continually needed to be raised.

The debt ceiling has been raised 10 times in the last decade. But this time Republicans in both the House and Senate are demanding major spending cuts in exchange for another debt level raise.

Many of them – notably Congressman Paul Ryan (R-Wisc.) and Senator Kay Bailey Hutchison (R-Tex.) – are demanding that any deal on the debt ceiling include plans to revamp both Social Security and Medicare. Under Hutchison’s plan, the Social Security retirement age would gradually rise, finally reaching 69 in 2027, and the yearly cost-of-living adjustment (COLA) would be shaved by 1 percent. Ryan has called for significant cuts in Social Security, albeit without concrete details on how to achieve them. Democrats, on the other hand, aren’t willing to budge on these programs, nor agree to certain tax cuts. Thus, the gridlock in the nation’s capital.


As the August 2 deadline looms, many pundits are predicting that a debt ceiling deal will eventually be reached, likely in the final hours. The White House, for its part, is backtracking from Obama’s warning about Social Security payments. “We will not get to that point,” Press Secretary Jay Carney told reporters a day after the President’s CBS News interview.
While we support efforts to reign in federal spending, as Social Security disability attorneys, we understand just how crucial Social Security benefits are as a means of support for both retirees and persons who are unable to work due to disability. If you are disabled and unable to work for 12 months or more, you are eligible for Social Security disability benefits. An experienced disability lawyer can assist you in compiling the necessary evidence to support a claim, file the claim on your behalf and represent you on appeal, if necessary.