What Happens to Social Security in a Budget Impasse?

Congress has repeatedly used stopgap CRs in recent years to keep the government running as the House and Senate struggled to pass regular budget bills. For example, the 2024 federal budget was adopted in late March, nearly six months into that fiscal year.

The 2024 budget authorized the SSA to spend $14.2 billion — about 1 percent of its revenue — on customer service and operations. While that represented a $100 million increase from the previous year, the Center for Budget and Policy Priorities, a Washington, D.C., think tank, estimates that, adjusted for inflation, Social Security’s customer service budget shrank by 19 percent from 2010 to 2024 while the number of beneficiaries grew by 25 percent.

The SSA, like the rest of the federal government, is currently operating under a continuing resolution that maintains fiscal 2024 funding levels. President Biden proposed a $15.4 billion SSA operating budget for 2025, while the House Appropriations Committee has proposed $13.8 billion.

Shortly before leaving office at the end of November, former Social Security Commissioner Martin O’Malley told a House committee that the SSA would “lose over 2,000 staff in the first half of the fiscal year” if Congress maintains current funding levels with another continuing resolution.

“We would likely have to reduce the hours field offices are open to the public and may even need to close offices over time,” O’Malley said. He predicted that the average hold time for callers to the SSA’s national help line (800-772-1213), which had dropped from about 42 minutes in November 2023 to just under 13 minutes in October 2024, would rise again.

Shutdown plan

In the event of a government shutdown, which most recently occurred over the winter of 2018-19, the SSA has a detailed contingency plan laying out how it would operate. It states that the agency “will continue activities critical to our direct-service operations and those needed to ensure accurate and timely payment of benefits.”

Payroll tax revenue will continue to go into the trust funds that supply money to cover retirement benefits, survivor benefits , family benefits and Social Security Disability Insurance (SSDI), and the SSA says it has legal authority to process payments even if congressional appropriations lapse.

The SSA also administers Supplemental Security Income (SSI), a safety-net benefit for people with very low incomes who are visually impaired, have a disability or are age 65 and older. While SSI is paid out of general government revenues, the SSA says it has enough previously appropriated money to continue making SSI payments for the next three months, longer than any past shutdown. 

Under the shutdown plan, the SSA says it would be able to keep most of its staff on board and maintain essential functions and services, such as paying benefits, processing benefit applications and appeals, holding disability hearings, and issuing new and replacement Social Security cards.

Some Social Security services and activities would be suspended in the immediate aftermath of a shutdown, among them benefit verifications, processing overpayments, information-technology improvements, public relations and training. If a shutdown lasts more than five days, the SSA says, it would “reevaluate” whether furloughs are necessary but would retain workers “critical to our direct-service operations.”