The Effect Of The Upcoming Government Shutdown On Social Security

On Friday, February 18, 2011, the Republican-controlled House of Representatives passed their version of the FY2012 budget, covering the seven months remaining until the end of the fiscal year. The Senate will take up the measure on Tuesday. The House’s measure, would slash a net total of $61 billion in agency discretionary spending for the remaining fiscal year. It is packed with cuts to hundreds of federal programs, including the FBI, state and local law enforcement, and the Food and Drug Administration, and terminations of others. The measure faces very strong opposition from majority Democrats in the Senate.

On Tuesday, President Obama threatened to veto the bill if it reached his desk in anything like the Republican-backed version, in a statement released by the White House Office of Management and Budget.

If a budget bill is not passed and signed into law by March 3, 2011, the Federal Government’s authority to spend money will expire at 12:01 AM the next day. The Federal government will shut down. Speaker of the House Boehner has already said that the House would not pass any more continuing resolutions — it is the budget, or nothing.

Social Security Planning For Furloughs

The Social Security Administration (SSA) has started considering how it would enact a furlough in case of a shutdown. On February 22, 2011, SSA will enter into bargaining with the American Federation of Government Employees (AFGE), the union which represents Social Security workers (among many other Federal workers) over how to implement a potential furlough.

An SSA official said the agency has “largely planned who would make up a ‘skeleton crew’ that would have to keep working during a shutdown. Most of these employees would have to maintain computer systems, facilities, and other elements of SSA’s infrastructure, or provide security at buildings.”

The 1995 – 1996 Furloughs

In the 1995-1996 furloughs, I was one of those designated to be part of the “skeleton crew” for my office. SSA called us “essential employees,” which the rest of the staff, who were furloughed, took to mean they were unessential and were rather insulted. In my office, there were three of us, all management officials, who had to show up and open the office. There was little we could do except answer the phone and talk to people who came in. We told these customers there was no real work being done in this office, or anywhere else in the Federal government. There was also no guarantee we would be paid. As it was, our pay, essential and non-essential employees alike, wasn’t straightened out for about six weeks.

There were two furloughs that winter. The fiscal year began without a budget, due to disagreement between the Republican-controlled congress, led by Speaker Newt Gingrich and Senate Majority Leader Bob Dole, and President Clinton, over the depth of cuts the Republicans wanted to make to Medicare, education, the environment, and public health funding. The Federal government was operating under a continuing resolution, which was due to expire on November 13, 1995. No agreement was reached, and the Federal government was shut down and most employees were furloughed. The furlough lasted from November 14 through November 19, 1995. It ended when a four week continuing resolution was passed. The second shutdown lasted from December 16, 1995 through January 6, 1996.

Figures provided by the Clinton Administration for the first, six day, shutdown show how much it cost, which was “$700 – $800 million including $400 million to furloughed federal employees who were paid, but did not report to work. The Treasury Department reported another $400 million in lost revenue over the four days that the IRS enforcement divisions were closed.” One can extrapolate from this that the second shutdown cost about three times as much, or $2.1 to $2.4 billion dollars, and that the Treasury Department lost about $1.2 billion in revenue. That is a lot of money for Republican grandstanding, and it ended Newt Gingrich’s career (and helped cost Bob Dole the Presidency in 1996.)

The Federal courts had already ruled after an earlier shutdown, that Federal employees who are kept from working due to a furlough must still be paid once the furlough has lifted. This is still true. So when the Republicans grandstand again, the deficit will be worsened by about $150 million per day each day the government is shut down. Over $1 billion per week. The next time you hear from a Republican that he cares about deficit reduction, tell him he is a liar.

Social Security benefit checks and direct deposits which were due on January 3, 1996, were delayed until after the shutdown was over, the SSA computer programs which generated the payments could be run, the tapes containing payment data could be delivered to the Treasury Department, and the Treasury Department could process the payments. I seem to recall that the payments were at least a week late, maybe more.

We stand on the brink of having this happening again.

The Potential Effect Now

About 58 million Americans now receive Social Security payments of some kind. They have already been denied a COLA for two years in a row.

According to Howard Feinman, of the Huffington Post, “…(K)eep in mind that, in 2008, voters 65 and older went heavily Republican, voting by a 52-to-44 margin for Sen. John McCain over then-Sen. Barack Obama. Does the GOP really want to risk its rep with one of its own constituencies?

The first wave of Social Security deposits after a shutdown — to about 12-15 million people — is scheduled to go out on March 10 [actually Wednesday, March 9, is payment delivery day.]

That’s the date when the plane really does crash.

For the entire article, please see The Real Losers In A Government Shutdown.

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