What Happens To The Social Safety Net If The Government Shuts Down?

March 30, 2011 | Huffington Post |  Link to article

WASHINGTON -- What happens to the social safety net if the government shuts down on April 8?

The Obama administration won't say whether beneficiaries of programs like Social Security, unemployment insurance, or food stamps will continue to receive checks in the event of a shutdown. Moira Mack, a spokeswoman for the Office of Management and Budget, said all agencies have had contingency plans since 1980 and noted that members of Congress and the president want to avoid a shutdown. But Mack declined to discuss what would happen if the government does close for business. "We're not getting into hypotheticals," she said.

In a recent memo (pdf) to federal agency directors, OMB advised: "During an absence of appropriations, agency heads must limit obligations to those needed to maintain the minimum level of essential activities necessary to protect life and property."

Agencies queried by HuffPost declined to specify what their "essential activities" would include. Retirement and disability benefits? The Social Security Administration did not respond to requests for comment. Unemployment insurance? The Department of Labor declined to say what might happen. Food Stamps? A USDA official said it would be premature to speculate.

Ron Haskins, a former White House and congressional adviser on welfare issues and current co-director of the Brookings Institution's Center on Children and Families, speculated that wide swaths of the safety net would remain intact.

"I would think the agencies would determine many of these programs, especially safety net programs, are essential," Haskins said. Many experts agree with Haskins, citing what happened during the most recent government shutdown.

The federal government closed for 21 days from December 1995 to January 1996. Monthly Social Security checks continued for existing beneficiaries even though Social Security Administration initially furloughed most of its workers. But the agency discovered it needed to bring most of them back to deal with issues like "telephone calls from customers needing a Social Security card to work or who needed to change the address where their check should be mailed for the following month," according to a Congressional Research Service report.

Social Security recipients will still see receive their benefits even if the federal government switches off next month, said Cristina Martin Firvida, a lobbyist for the AARP.

"We are confident that for current beneficiaries, Social Security checks will continue to be paid, both in terms of being directly deposited, and also for those who receive paper checks, the post will continue to mail them," Firvida said.

"We are equally certain that depending on the length of the shutdown, should one happen, there could be some delays for new applicants." Firvida said. "That is a bigger area of concern for us, and that concern would grow exponentially if the length of the shutdown becomes prolonged. If there is a short shutdown, the impact on applicants would be relatively minor."

Current Medicare beneficiaries also should not be affected by a short shutdown, said AARP's Mary Liz Burns. "Unless the shutdown continues for weeks, the effects on beneficiaries should be minimal," Burns said. But Burns warned reimbursements "for doctors and hospitals could slow down if the contractors who process the claims are deemed nonessential."

A similar situation would likely occur with unemployment insurance benefits. Judy Conti of the National Employment Law Project said federally-funded extended unemployment benefits, which are distributed to the long-term unemployed by state agencies, should continue even if the lights go out in Washington. "State agencies feel confident that they can continue to deliver federal UI benfits even if there's a shutdown," Conti said. But first-time applicants for federal jobless aid, which kicks in after six months of state aid, could face delays, Conti said, and so could people transferring from one "tier" of federal jobless aid to another.

Elizabeth Lower-Basch, a senior analyst with the Center for Law and Social Policy, said other programs administered at the state level, including Temporary Assistance for Needy Families (formerly known as welfare) and the Supplemental Nutrition Assistance Program (food stamps), should continue as well. "We expect them to continue providing people with these benefits," Lower-Basch said. "I don't think we need to panic people about these programs."

A shutdown could crimp the Earned Income Tax Credit, the government's largest anti-poverty program, which sent checks to some 26 million households last year.

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