After nearly seven years, the U.S. government has shutdown following a deadlock between the Republican Party and the Democratic Party with regards to the spending bill. The last government shutdown occurred at the end of 2018 during the Trump Administration’s first term in office and lasted 35 days, making it the longest government shutdown in American history.
In the event of a government shutdown, the operations of many federal agencies are either halted or delayed, and as a result, services, payments, and even employees can be impacted. This then begs the question of what will happen to the millions of vulnerable individuals who are reliant on monthly benefit checks from said federal agencies such as Social Security, VA, or SNAP recipients.
The good news for existing Social Security or VA beneficiaries is that their payments should still be rolled out uninterrupted. SNAP recipients, on the other hand, may be faced with a delay if the shutdown is not lifted soon. Here is everything you need to know.
Federal agency funding
Federal agencies have two kinds of funding: mandatory spending, and discretionary spending. The type of funding used by federal agencies is the deciding factor regarding whether or not the agency will continue to function during a shutdown. Federal agencies with mandatory spending receive their revenue automatically due to existing laws. This means that Congressional funding approval will not be required on a yearly basis. Agencies who are funded with mandatory spending include Social Security, the VA, and Medicare.
Discretionary spending requires a budget to be passed by Congress on an annual basis. This includes sectors such as education, or defense, amongst other federal agencies. Agencies with discretionary spending are often directly impacted during shutdowns with the fallout resulting in furloughs or interruptions in service delivery.
Social Security and VA benefits are safe
Since Social Security is funded primarily by means of a dedicated payroll tax, it falls under mandatory spending and as such, benefits will still continue to be paid out despite the government shutdown. The same goes for VA benefits, and according to a VA spokesperson who spoke with Newsweek, “VA benefits will continue to be processed and delivered, including compensation, pension, education, and housing benefits.”
In short benefits will continue to roll out, however, this is likely only for existing beneficiaries. If you are an applicant, or trying to get a new Social Security card issued, you will unfortunately be met with delays. Additionally, since the Bureau of Labor Statistics is also set to halt all operations during the shutdown, the Social Security COLA announcement that was scheduled for mid-October will also potentially face delays.
SNAP delays
While the Supplemental Nutrition Assistance Program (SNAP) falls under the mandatory spending category, funding must still be appropriated by lawmakers on a yearly basis. As such, if this shutdown is prolonged and a budget or stopgap measure is not passed, funding will most likely be disrupted and beneficiaries will be hit with delays or interruptions to their payments in the near future.
The good news is that if the shutdown is a short-term one, the USDA may be able to rely on the existing funding to get by until a resolution is reached. A prolonged shutdown is a worst case scenario since the longest shutdown on record currently only lasted 35 days. As such, SNAP benefits will not likely face interruptions or delays.
“The Food and Nutrition Service’s updated accounting process also considers the upcoming month’s benefits to be ‘obligated’ in the prior month when issuance files are sent to the EBT [electronic benefits transfer] vendor and extends the current federal fiscal year’s appropriations to cover the benefits for the first month of the next federal fiscal year. In this case, October benefits are obligated in September,” as per the Food Action and Research Center.
“Accordingly, there is no need for SNAP recipients to worry about missing their October payments even if a shutdown were to occur.”