Could $25 billion in Social Security payments force a debt-limit deal?

On Friday, June 2, millions of Americans are due a total of $25 billion worth of Social Security payments. And more than anything else, that may prove a decisive element in forcing an end to the partisan standoff over raising the federal debt limit.

That obligation is “an enforcement mechanism we can’t ignore,” Democratic Senator Chris Coons of Delaware, one of President Joe Biden’s top allies in Congress, said on MSNBC Wednesday. “When they find out that they’re not getting that check, our phones will light up like a Christmas tree.”

Treasury Secretary Janet Yellen has repeatedly warned that her department could run out of sufficient cash to make all federal payments as soon as June 1, putting the obligations coming due the next day at risk.

She has also for months said it’s “unlikely” that Social Security benefits could be paid, but also said that there will be “difficult” choices to make if the debt limit isn’t raised and the Treasury runs out of funds. On Wednesday, she declined to specify “what exactly is possible and what is not possible.”

When it comes to Social Security — a vast retirement and disability program that had almost 66 million beneficiaries as of last year — what potentially makes an exception possible is that it has its own funding stream, separate from general government obligations. But even if it’s a theoretical option for the Treasury to keep making payments, experts say it’s legally questionable and in any event logistically challenging.

Which leaves the beneficiaries at risk. Those who are due to receive their money next week are retirees aged 88 and older, along with low-income individuals with disabilities. “It’s a cruel twist of fate,” said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities in Washington.