President Obama has issued a warning to million of Americans that rely financially on Social Security – there may not be any checks coming in August.
There are standstill negotiations over the federal debt on Capitol Hill. As there is a potential for default, the President stated that if a deal is not reached by August 2, the 20 million Americans that rely on Social Security, Disability, and Veterans payments may not receive their monies.
Several politicians, including New York Congressman Tom Reed believe that the warning was nothing more than a scare tactic to get the administration to agree to a deal with higher tax increases. However, the President maintains that there is not enough money to cover the checks if issues do not get resolved by the August 2 date.
While not everyone believes the warning is a reality, there are still causes for concern. Many who rely on these government payments will not be able to survive without a monthly check. Congressman Reed stated that if a deal is not reach to permit federal benefit checks to go out on schedule, he would suspend taking his own paycheck.
As the federal administration tries to avoid a federal debt default, Obama has indicated he is open to cutting Social Security if it helps secure a deficit-reduction deal with Republicans. While there is enough money in the Social Security's account to cover August payments because it agency generates plenty of revenue, the government-backed debt obligations can end up being refused in order to meet other debt obligations.
