UPDATE Sept. 30, 2021:
Every year, Congress must pass and the president must sign a budget bill for the next fiscal year to appropriate funding for agencies and programs that rely on annual funding. When Congress and the president fail to pass and sign a new budget before the start of the next fiscal year, which begins in October, the government enters a “shutdown” in which everything without funding can no longer operate.
Congress has until the end of day on Sept. 30, 2021 to agree to a new budget to avoid a shutdown.
Viewer Sheri asked VERIFY about the impacts of a government shutdown on people receiving Social Security payments.
Are social security payments impacted by government shutdowns?
No, government shutdowns do not impact Social Security payments. Funding for the Social Security program draws from an independent revenue pool that doesn’t require annual funding. However, a government shutdown would prevent the SSA from issuing new Social Security cards, however.
WHAT WE FOUND
The CRFB says Social Security payments will continue through a government shutdown. This is also true of other mandatory spending not subject to annual appropriations, such as Medicare and Medicaid. Mandatory spending is not set by annual budget bills, the CBO says.
The Social Security Administration explains Social Security is financed through a dedicated payroll tax, and any extra income the taxes generate go into trust funds reserved for future Social Security payments. Those funds won’t be depleted until 2033, according to the SSA’s 2021 report.
The SSA has money available both for administrative costs to make payments on time and for the payments themselves, even if the government were to shut down. But a government shutdown could cause issues for aspects of the Social Security program other than issuing payments.
"We know from past government shutdowns that the federal government will be able to send out Social Security benefit payments, even if it is partially shut down," said Shai Akabas, director of economic policy at the Bipartisan Policy Center. "What is impacted in Social Security is the ability of new beneficiaries to apply for benefits because some of the employees who would be handling that will be furloughed for that period of time and not working."
That means the program would be unable to verify applicants' eligibility for benefits and unable to issue any new Social Security cards, according to the CRFB. In a blog post from just before the start of the 2018-2019 government shutdown, Democratic Representative Dan Kildee from Michigan said 60,000 Americans apply for a Social Security card each day.
While not a factor in most government shutdowns, a potential shutdown in 2021 would coincide with the Treasury Department approaching the debt limit. The Treasury Department would have to keep its daily spending no higher than its daily revenue if it were to reach this debt limit. The Bipartisan Policy Center says it’s unclear if the Treasury Department has the capability or legal authority to pick and choose which programs to pay for. As a result, both the Bipartisan Policy Center and Treasury Secretary Janet Yellen have warned that Social Security payments could be delayed in a scenario where the Department of the Treasury reaches the debt limit before Congress suspends or increases it.