Senator Josh Hawley (R-MO) recently introduced legislation that would exempt Social Security and Medicare from being used in negotiations over the federal government raising the debt ceiling.
The debt limit is the total amount of money that the federal government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.
The Congressional Budget Office indicated last month the Treasury Department will exhaust its ability to pay all its bills sometime between July and September. The current debt ceiling is more than $31 trillion.
To avoid hitting the federal government’s debt limit, Department of Treasury Secretary Janet Yellen notified Congress in a letter in January that the department would take its statutory extraordinary measures and suspend investments in some federal retirement programs.
Yellen said the two extraordinary measures Treasury would be implementing are:
(1) redeeming existing, and suspending new, investments of the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health Benefits Fund (Postal Fund), and
(2) suspending reinvestment of the Government Securities Investment Fund (G Fund) of the Federal Employees Retirement System Thrift Savings Plan.
Senator Hawley’s legislation — the Keep Our Promises Act — proposes to keep Social Security and Medicare from the debt ceiling negotiations.
Hawley believes Social Security and Medicare beneficiaries must be confident that their benefits will be paid in full and on time, and that his proposed bill will “ensure these programs are never used as leverage in negotiations over the debt limit.”
“Social Security and Medicare are not bargaining chips,” said Hawley. “These are promises we’ve made to the American people, and we must not break them.”
According to Hawley, the Keep Our Promises Act would:
- Exempt Social Security and Medicare from the statutory debt limit.
- Authorize the Treasury Department, when the statutory debt limit is reached, to issue as much additional debt as necessary to fully fund Social Security and Medicare and disperse on-time benefits to America’s seniors.
- Permit the Treasury Department to use this authority in all future debt limit episodes, thereby permanently insulating Social Security and Medicare from any impact of a debt ceiling standoff.
To view the full text of the bill, go here.