Will Social Security Benefits and Federal Employee Pay Checks Stop if the Government Shuts Down

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in Government, Military, Pay

Not initially, though there maybe some delays in payments being made. Non-essential federal workers may be furloughed (i.e a few days off work without pay), and Congress won’t be able to pass any new appropriations bills. Salaried employees will likely see no interruption in their payments, though hourly or contract workers may see temporary pay freezes since they will not be working.

Social Security benefits would remain largely unaffected as they are held in a separate trust fund called GAS (Government Account Series) which is funded by FICA payroll taxes. Social security administration employees will likely be more impacted than recipients.

Military pay and benefits would also remain intact, thought certain civilian workers and contract staff, who are paid on hours worked, may see pay freezes.

What is the cause of the Government shut-down?

House Republicans passed legislation that would slash over $60 billion in government spending between now and the end of September, setting up a showdown with President Barack Obama and the Democratic controlled Senate who oppose many of the cuts. After more than 90 hours of debate and many round-the-clock sessions, the House decided 235-189 to send the measure to the Senate. No democrats voted for the bill. The bill contains spending cuts and also the funds required to keep the government funded. If a bill (continuing resolution) is not approved by Congress and the President by March 4th, the government’s non-essential services will lose their funding and be forced to shut-down.

Republicans argue that they will not approve government funding unless the proposed spending cuts are approved. The cuts (more than 100 in total) are aimed at cutting entitlement programs but also at big government agencies like the Environmental Protection Agency($3.08 billion in cuts), the Securities and Exchange Commission ($131 million), the Consumer Financial Protection Bureau and the Commodity Futures Trading Commission. It also contains provisions to de-fund health care. Senate Democrats already have said they won’t accept the cuts in the $1.2 trillion spending bill, and Obama’s budget office has threatened a presidential veto.

I will continue to provide updated tax information as this debate rages in Congress and encourage you to subscribe (free) to get the latest news.

{ 9 comments… read them below or add one }

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sue April 6, 2011 at 1:43 am

If government shuts down, are the Senate, House, and President going to have their pay checks withheld? Probably not because they think they are untouchable. People they are supposed to serve are not important to our country’s leaders, only their power hunger attitudes. What happens to the economy when citizens have no pay to spend on goods and services?

Danny March 30, 2011 at 2:49 am

This is a classic case of “It does not affect me, so who cares”.Basically the American citizen and our Country will continue to suffer loss, hardship, and set backs because of the decisions being made by appointed “leaders”. Point in case, we spent hundreds of millions of dollars in one day bombing Lybia , for what? And yet some gov. employees could possible not be paid! Most of the problems we have can be solved with something that is free. It is called common sense. We have our nose in everyones business and the Goverments priorities are focused elsewhere. These decisions to waste money on things that are really not important, continue to hurt The United States of America. Which cause these types of extreme budget cuts. Over time, these costly decisions have added up (i.e The Deficit). Try something we have not done yet like take care of the good ol’e USA first and quit trying to save the world. Look where that has gotten us thus far……..

Sandy March 10, 2011 at 12:41 am

Will OHA be affected? I am a dependant of a service member stationed in Okinawa. OHA for off-base housing is high. We would need to move on-base if we thought our OHA would be affected by the federal pay freeze. This would require advanced planning since there are not enough units on-base for everyone. I am glad to hear that Military Pay will not be affected. Can you explain your first two words, “not initially”.

gerald e shilling February 27, 2011 at 12:14 am

i haven;t recieve my 2010 tax;s

gerald e shilling February 27, 2011 at 12:12 am

i have not recieved my w2 form 2010 for taxs. i do not know what happen, but i did not recieve them

jane February 24, 2011 at 2:56 pm

what are people to do with out there money, who cant survive in this world with what little they get now

Kim February 24, 2011 at 10:05 am

This is not fair to the civilian people that work for hourly pay and depend on thet income to pay there bills. What would the government suggest we tell our creditors?

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