October 1st - What Happens to Social Security, SNAP, and VA Benefits?

As many Americans feared, the U.S. Senate failed on Monday to pass a temporary funding measure that would have suspended the federal debt ceiling and prevented a partial government shutdown set for the end of this week. A stopgap bill (otherwise known as a clean continuing resolution), introduced by Senate Democrats, was aimed at funding the government through December 3rd, and suspending the debt ceiling through December 16th, 2022. The measure had already been approved by the House, but was met with opposition by Republicans when it arrived in the Senate. Senate Majority Leader Chuck Schumer from New York remarks that he had hoped Republicans would join Democrats to pass the measure and avoid a shutdown of the federal government.

On the flip side of the coin, Republicans are fearful of raising the Federal Debt limit even higher beyond historic levels. Senate Minority Leader Mitch McConnell from Kentucky commented on this situation, saying Republicans are not willing to pass any measure that would raise or suspend the debt ceiling. McConnell and his fellow Republicans want Democrats to suspend the debt ceiling on their own, on single partisan terms, through a parliamentary maneuver called reconciliation. The reason for this being, Republicans do not want to claim responsibility for an even higher inflated amount of government spending, and any implications that may come as a result of that.

More government spending means potential higher tax hikes for low-income and middle class working families. Other implications include possibly reducing military spending, thus weakening our national security amidst a sea of foreign threats that may be waiting for the US to lower its defenses. Now while both parties have promised to continue working to fund federal government operations before the midnight Thursday deadline when money is expected to run out, Congress has enacted no appropriations bills that would set discretionary spending levels for the next year. And so what will happen to such programs as Social Security, veteran’s benefits and the Supplemental Nutrition Assistance Program if the government shuts down?

First of all, let’s define what it means to have a government shutdown. A government shutdown happens when Congress fails to pass bills to fund federal agencies and programs. There are two types of spending in the federal government: mandatory spending and discretionary spending. Mandatory spending is required by law for specific programs. And the remaining money in the federal budget is known as discretionary funds. Typically, discretionary funds make up about 30% of the national budget.

Each year, Congress must pass budget legislation that consists of 12 appropriations bills that fund programs for the next fiscal year which begins on October 1st. And so far, none of those bills have been passed by Congress. If the appropriations bills are not passed, or in their place, a continuing resolution is not enacted, then the agencies that depend on those funds, will have to shut down. The shutdown means that the agencies must stop all non-essential discretionary functions until a funding bill has been passed and signed into law by the president. Some functions paid for by discretionary funds are deemed “essential” services. And those essential services will continue, as do all of the mandatory spending programs.

So how likely is this government shutdown to happen? The White House has notified agencies last week to prepare for a shutdown. And after Monday’s failed vote, we are indeed closer to a shutdown, however it is not yet a done deal. As for how this will affect seniors on Social Security, SNAP or VA benefits, you won’t need to worry about any possible reductions or suspensions of your benefits. However, the shutdown could certainly cause some delays. Medicare services are expected to continue, at least for some time. Veterans’ affairs care and services will continue. Disabled veterans, dependents and survivors would continue to receive their VA benefits payments. As for Social Security recipients, Social Security checks will still be delivered in the event of a shutdown. However, things such as benefit verification and card issuance would be put on hold until the shutdown is over. And lastly regarding SNAP beneficiaries, SNAP funding is mandatory, however continuing resolutions often only authorize benefits for 30 days, after a shutdown begins.

Now let’s define what the debt ceiling is. The debt ceiling is the limit on how much money the federal government is allowed to borrow to pay for certain services. And as of now, the current Federal borrowing limit is $28.4 trillion. Now what happens if Congress refuses to raise the debt ceiling? If the limit is not raised, the government will run out of money to service the debt the country owes. And according to Treasury Secretary Janet Yellen, that would happen sometime in October. In the meantime, the government would not be able to pay for its purchases or any other federal obligations. We can only hope now that the Senate can come to some sort of an agreement this week that makes the most sense for struggling Americans.

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