Social Security for oldest, poorest could be at risk in debt default
As President Joe Biden and House Speaker Kevin McCarthy, R-Calif., continue to negotiate ahead of a June debt ceiling deadline, experts are warning that Social Security checks could be at risk if there is a default.
Based on the payment schedule for those monthly payments, the oldest and poorest beneficiaries could be the first who may have their payments affected, according to Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.
"That would be devastating for those people, because they rely on their benefits so much," Romig said.
If lawmakers fail to reach an agreement, U.S. could default on its debt as soon as June 1, according to Treasury Secretary Janet Yellen. That, in turn, would interfere with the Social Security benefits slated to go out the first week of June, Romig said.
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Beneficiaries scheduled to receive payments that week include those who started receiving Social Security before May 1997 who are age 88 or older, noted Romig.
In addition, Supplemental Security Income benefits are paid that week for those who receive benefits either exclusively through that program or in combination with Social Security. Supplemental Security Income, or SSI, provides monthly checks to adults and children with disabilities or blindness, as well as people age 65 and up with limited financial resources. To qualify for SSI, beneficiaries generally must have income and resources below certain thresholds.
Because SSI beneficiaries face a $2,000 asset limit including all their financial resources, they do not have a cushion to fall back on if they do not receive their checks, Romig noted.
"They are the most immediately at risk in a default scenario," Romig said. "They really don't have a fallback."
Source: CNBC
