Social Security, checks, and Rube Goldberg

The debt ceiling limit is back in the news.  In the past, political leaders have responded to concerns about this issue by suggesting that Social Security checks might not go out on time should Congress not agree on another debt ceiling extension.

This raises the obvious question: why a program with a $2.8-trillion reserve cannot pay benefits on time.

Pundits have weighed in on the subject, as have the fact-checkers, who largely agree that checks should not be at risk — at least in theory.  It is time for the Treasury Department to explain why Social Security checks might not be sent, and what steps have been taken to protect seniors who depend on the monthly checks.

In 2021, the last time this question surfaced, Treasury secretary Yellen wrote an op-ed in the Wall Street Journal suggesting that 50 million seniors "could stop receiving benefits for a time."  

Clearly, "could" is a puzzling choice of words, considering that Social Security serves as a lifeline for many of America's senior citizens.  Telling these Americans that "their monthly checks are in danger" conveys a cavalier attitude to the needs of the elderly.

If there is any uncertainty about how Social Security would work in a situation where the government's finances get tight, the question should move to the top of the priority list.  "Could" implies that the question is not at the top list.

The history of the question makes me wonder whether it is on the list at all.  It has lingered for more than a decade, dating back to 2011, when Barack Obama warned that "checks might not go out" in a CBS News interview

It is understandable, if not entirely excusable, for a president to be unaware of the intricate details behind getting a Social Security check to every beneficiary.  The president appoints someone to look after the details of how money moves from incoming taxes to the payment of checks — namely, the Treasury secretary.  Thus, it is that person's job to know whether the checks heading to seniors will be sent or not.

After more than a decade living with this uncertainty, seniors deserve an immediate answer.

The concern about checks getting to seniors is somewhat justified because there is a gap between the theory of Social Security and the actual mechanics of moving dollars from the pockets of workers to the checks of seniors.  These dollars indeed pass briefly through the accounts of the general government as the government sorts out what is a payroll tax from the rest of the incoming cash.

What is entirely unjustified is the doubt.  While the back office operation is a bit complicated, Social Security can't really be a Rube Goldberg machine, where no one really knows whether the mouse will eat the cheese, which drops the weight, which releases the car that shuts off the flamethrower pointed at 20 percent of the public.

Instead of fostering fear and uncertainty, public servants like Secretary Yellen should provide assurance and clarity to the public that she understands the problem and is working to solve it.

Yellen could explain to Congress that it would need to pass legislation to temporarily exempt bonds from the debt ceiling calculation so that a program with $2.8 trillion in reserves doesn't bounce any checks.  Believe it or not, the Congressional Research Service says that was the response in 1996, when Congress passed the required law in a month.  Interestingly, Sen. Josh Hawley recently introduced a similar bill, the Keep Our Promises Act, which seeks to replicate the 1996 legislation.

For example, as managing Trustee for the Social Security Trust Fund, Yellen has sole responsibility for the investment of trust fund assets and is required to invest only the portion of the funds not, in her judgment, needed to meet current withdrawals.

Yellen should be asked to explain why she is investing the money in bonds, which she fully doubts will be available when the money is needed.

If fact-checkers have time to provide answers in theory, it is not unreasonable to expect the Treasury secretary to provide concrete solutions. 

This is not too much to ask.  Actually, it is her job to do so.

Brenton Smith ( is a policy adviser with The Heartland Institute.

Image: Social Security Administration.

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