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A Possible Government Shutdown? What this means for Social Security...and You

At Binder & Binder®, it's business as usual, and we're going to continue working hard for our clients regardless of what happens. But, with the threat of a Government shutdown looming over our heads this evening, we want to take a second and let you, our clients and readers, know what this means for the Social Security Administration (SSA). This evening, a decision will be made as to whether or not the Government will approve a request for the Social Security Administration's contingency plan, which would allow the SSA to continue their activities during a potential lapse in Federal appropriations. This contingency plan would allow for SSA to continue operating, but at a lower functioning level. For example, Administrative Law Judges (ALJ) will continue to hear and decide cases in the Office of Disability Adjudication and Review (ODAR); however, all other employees will not be expected to show up to work.

Deputy Commissioner for Budget, Finance and Management, Michael G. Gallagher, stated in a letter issued to SSA on April 7, 2011:

As President Franklin D. Roosevelt recognized over 75 years ago when the Social Security Act became law, it is the "plain duty" of the Federal Government "to provide for the security upon which welfare depends." We are committed to honoring that "plain duty" by ensure that, consistent with the constraints of a partial shutdown, the American people receive the benefits they are due. We are confident that our plan both conforms to applicable law, regulation, guidance, and serves the American people in these difficult times.

Provided within the letter Deputy Commissioner Gallagher issued to SSA, was a more in-depth look at just what exactly the SSA's contingency plan would include. Quite simply, aside from continuing to hear cases and decide cases, all other activities would be postponed (such as scheduling hearings, screening cases for On-the-Record decision, decision-writing, etc.).

Early rumors spread that those who are currently receiving money from SSA, either through retirement or disability, would cease to receive their checks if the government did, indeed, shut down. Upon closer inspection this does not appear to be the case. We've faced a similar dilemma in recent years; the same issue occurred under President Clinton in 1995-1996. Charles Riley, staff reporter for CNN, indicates that Social Security will be safe during a Federal shutdown. He reports that Robert Reischauer, president of the Urban Institute and trustee of the Social Security and Medicare trust funds, revealed that rumors regarding Social Security checks not being sent out were "not true." According to Riley, Reischauer stated "The shutdown refers to discretionary spending, and Social Security is mandatory spending. It doesn't need an appropriations bill to go forward." Riley indicated that Social Security Benefits, which go to roughly 60 million Americans, are paid out of trust fund. This means that SSA has the implied legal authority to keep paying staffers who administer the checks.

While the implications of a government shutdown are fear-inducing, especially for those who depended up the government and SSA for their benefits, it seems as if we are in the clear for now. Although there will undoubtedly be changes if the government shutdown goes through, we would like to reassure our clients that we will continue to operate as normal.

1 Comment

I'm so glad we didn't have to deal with the govt shutdown. This article is still really important for people to read because even without imminent danger you should prepare for the future.

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