Senator offers way to cover Social Security checks, if government defaults

U.S. Senator Bill Nelson

Congress took a similar step in 1996

WASHINGTON, DC – The Treasury Department would be able to cover tens of millions of Social Security checks in the event of a government default, under legislation introduced in the U.S. Senate on Thursday, July 21, 2011.

Saying nearly four million people in Florida alone rely on Social Security checks, U.S. Sen. Bill Nelson (D-FL) filed legislation that would temporarily let officials not have to count Social Security obligations against the national debt limit.

A similar non-traditional approach was passed by Congress in 1996 during a conflict between then-Democratic President Bill Clinton and the Republican-controlled Congress over funding for major programs including Medicare.

Nelson disclosed he’s filing an updated version of the 1996 bill to protect Social Security in a letter to Treasury Secretary Timothy Geithner. His letter comes in the wake of President Obama's stark warning this week that Social Security payments may not go out next month, if Congress cannot agree on a package of spending cuts and an increase in the debt ceiling before Aug. 2.

Other lawmakers have filed a few Social Security measures already, but they are generally limited to making benefits a priority among competing government payments. They do not ensure that Social Security checks will be paid.

“During the 1996 debt-limit situation Congress passed a special temporary law that said Social Security didn’t count against the debt limit,” Nelson wrote in his letter to Geithner. “Would such a non-traditional measure be needed today? Would pending legislation that prioritizes Social Security obligations suffice? If not, I stand ready with legislation that would temporarily exempt Social Security obligations from the public debt limit.

“If congressional leaders fail to get beyond the partisan games and reach an agreement on spending cuts … the stakes are high not only for our economy, but also for the millions of seniors who depend solely on Social Security,” he wrote.

The Treasury Secretary anticipates the country will hit the debt limit on Aug. 2. Some benefit checks are supposed to go out as soon as Aug. 3.

“Time is of the essence,” Nelson said in his letter in which he asked Geithner for an immediate response on the best option.