How Debt Ceiling Affects Social Security Benefits?

The U.S. will run out of money to pay its bills which could affect retirees, disabled Americans, and children who are beneficiaries of Social Security unless Congress raises or suspends the nation’s debt ceiling.

How Debt Ceiling Affects Social Security Benefits? (PHOTO: CNBC)

The Nation’s Debt Ceiling

On Sunday,  Senate Majority Leader Chuck Schumer warned a “Social Security shutdown” could happen if the U.S. defaults on its obligations, and Social Security recipients could see their checks delayed, according to experts.

Furthermore,  the political tension around the fight over the debt ceiling makes it tough to predict what would happen with Social Security, partly because of conflicting laws.

Janet Yellen the Treasury Secretary stated her concerns about the dept ceiling that the US might experience economic and financial calamity and several Social Security beneficiaries will suffer particularly those people who only rely on Social Security as their main source of income.

READ ALSO: Stimulus Dates In 2023: Here Are The Federal Stimulus Programs In Spring

What Is Debt Ceiling? 

A debt Ceiling or debt limit, which is set by Congress represents the full amount of money the government can borrow to pay its debts. Hence, if the debt reaches the threshold and lawmakers fail to raise the borrowing limit, the US would be unable to settle what it owes and could default. Moreover, CNN reported that the X-date could arrive as soon as June 1, according to Yellen.

If the Xdate will really comes, there are no specifics occurrence of what exactly will happen, it will remain unclear and unpredictable.

The National Committee generally precautioning beneficiaries that Social Security checks, as well as payments from the federal government to veterans, food-stamp recipients, and reimbursements to state governments for Medicare or Medicaid, may be delayed if the government no longer has the legal authority to borrow.

But the length of the interruption would depend on how long it takes lawmakers to fix the fiscal situation. Hence, it is advisable that seniors and other recipients should monitor the negotiations over the debt limit.  They have to be very careful about anything that is paid automatically based on their Social Security payment, because that may not get there in full or on time if the debt limit isn’t raised on time.

READ ALSO: Stimulus Check 2023: Could More Checks Prevent Predicted Recession In U.S.?