Can Social Security Pay its Bills?

The author says that Social Security should be at the top of the Treasury Secretary’s priority list, but that it appears it may not be.

On Thursday, President Joe Biden signed a debt ceiling increase into law, ensuring that Social Security recipients will get their checks on time. 

Thankfully, this legislation enables seniors to return to the job of retirement without worrying about whether Social Security benefits might be delayed if lawmakers could not reach some agreement on how much money the government can borrow.

While that concern goes away, the basic question does not: why is it that a program with a reserve of $2.9 trillion can’t pay its bills?

This question should not be that difficult to answer. Pundits have offered theories on the subject as have the fact checkers who largely agree that checks should not be at risk. They offer theory. It is time for Treasury to explain in fact why checks might not go out and what steps it took to protect seniors who depend upon these checks.

The question surfaced back in September when Treasury Secretary Yellen wrote an op-ed in the Wall Street Journal suggesting that 50 million seniors “could stop receiving benefits for a time”. “Could” is a puzzling choice of words considering that Social Security serves as a lifeline for many of these people. Telling America that “maybe checks go out, and maybe they don’t” conveys a cavalier attitude to the needs of the elderly and the safety-nets that protect them.  

If there is any uncertainty about how Social Security would work in a situation where the government’s finances get tight, the question should move to the top of the priority list. “Could” implies that the question is not at the top of the list.

The history of the question makes me wonder whether it is on the list at all. It has lingered for more than a decade, dating back to 2011 when President Obama warned that “checks might not go out” in a CBS News interview.

It is understandable, if not entirely excusable, for a president to be unaware of the intricate details behind getting a Social Security check to every beneficiary. The president appoints someone to look after the details of how money moves from incoming taxes to the payment of checks, namely the Treasury Secretary. 

It is that person’s job to know whether the checks heading to seniors will bounce. After 10 years, seniors deserve an answer. 

The concern about checks getting to seniors is justified because there is a gap between the theory of Social Security and the actual mechanics of the venerated program. 

Most Americans understand at a high level that Social Security is set-apart from the finances of the broader government, where the program collects a dedicated stream of revenue in payroll taxes, plus has a reserve of excess cash to support the program in times like these where revenue might come up short. 

Unfortunately, fact and theory do not perfectly align. These dollars indeed pass briefly through the accounts of the general government as they move from the pockets of workers to the paychecks of seniors. 

While the back-office process is complex, Social Security can’t really be a Rube Goldberg machine, where no one really knows whether the mouse will eat the cheese, that drops the weight, that releases the car, that shuts-off the flamethrower pointed at 20 percent of the public. 

The uncertainty about these checks fostered by public servants requires answers. Those answers need to come from Secretary Yellen, who serves as managing Trustee for the Social Security Trust Fund. As such, she has the sole responsibility for the investment of trust fund assets, and is required to invest only the portion of the funds not, in her judgment, required to meet current withdrawals.

At the end of November, the decision was made to invest more than $20 billion in bonds that – according to Secretary Yellen – could cause the delay of the payment of benefits. 

If no one knows to a degree of certainty that the payment of benefits is secure, Congress should take immediate action to at least ask the question, if not provide a clear answer, to voters. 

If fact checkers have time to provide answers in theory, it is not unreasonable to expect the Treasury Secretary to provide one in fact. 

It is her job.

About the Author

Brenton Smith (A.K.A. Joe The Economist) writes nationally on the issue of Social Security reform with work appearing in Forbes,, MarketWatch,, and regional media like The Denver Post.