If there’s no agreement on the debt ceiling, what happens to Social Security?

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Experts suggest payments to seniors could be delayed

Millions of retired Americans depend on getting a Social Security payment each month to help make ends meet. But events in Washington could disrupt those payments.

It’s all because of something called the “debt ceiling,” which is the maximum amount of money the U.S. government is authorized by law to borrow. Each year Congress must vote to increase the amount to keep the government from defaulting.

This year, things are a little dicey. Since January Republicans have held a narrow majority in the House and have voted to increase the debt ceiling but only if Congress also votes to cut spending. Democrats still control the Senate and are insisting on a “clean” debt ceiling bill, promising to address spending in separate legislation.

So far, neither side has shown any willingness to budge and the deadline looms in early June. If there is no agreement the U.S. government would be in default and limited in what it can spend. Should that happen, seniors on Social Security could feel some pain.

“A default would hit the nation’s seniors especially hard, as the payment of Social Security, Medicare, and Medicaid benefits would be jeopardized,” the National Committee to Preserve Social Security and Medicare said in a statement. “This could be devastating for the 65 million older Americans on Social Security and the 63 million beneficiaries of Medicare.”

‘May not be made on time or in full’

The advocacy group has warned that without the legal authority to borrow beyond the current debt ceiling, Social Security, Medicare, Medicaid, and other payments “may not be made on time and in full.” The group says even a short delay in the payment of Social Security benefits would pose a burden for the millions of Americans who rely on their earned benefits to pay for out-of-pocket health care expenses, food, rent and utilities. 

What are the odds of a U.S. government default? Experts say it’s hard to gauge because it has never happened before.

In past government shutdowns, when lawmakers couldn't agree on a budget, there has been money available to pay entitlement benefits. A government default is uncharted territory.

Even if there is a default, Ed Mills, Washington policy analyst at Raymond James, believes it would be short-lived because of the political pressure it would unleash.

“If there is a scenario where seniors are not getting their Social Security checks, there would be a near immediate resolution of this fight,” Mills told CNBC.

Mills said the chances of Social Security checks not being sent are “exceptionally low.”

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