How a Government Shutdown Could Affect Social Security

(Stefani Reynolds/Bloomberg)

Key Points

• A potential government shutdown could disrupt Social Security Administration customer service, though benefit payments will continue as scheduled.
• The Social Security Administration has 2,000 fewer field office workers than at the beginning of the year, impacting service availability.
• A shutdown could complicate matters for beneficiaries still receiving paper checks, coinciding with a modernization effort to end them.

A government shutdown this week could hamper customer service at the Social Security Administration, even as benefit checks continue to go out as scheduled.

The likelihood of a partial government shutdown has risen along with lawmakers’ failure to agree on a stopgap measure to fund operations past the end of the fiscal year. A key sticking point is Democrats’ desire to extend enhanced subsidies that make health insurance more affordable for the 24 million Americans enrolled in so-called Obamacare health plans. Barring a resolution by Sept. 30, the federal government will stop non-essential operations on Oct. 1.

Social Security checks are considered mandatory, and recipients needn’t fear interruptions to their payments. However, anyone with business at the Social Security Administration could have a harder time getting help from an agency already straining under personnel cuts imposed by the Department of Government Efficiency, some experts fear.

There are at least 2,000 fewer workers in Social Security field offices throughout the country than at the beginning of the year, says Kathleen Romig, director of Social Security and Disability Policy at the Center on Budget and Policy Priorities.

Even before the DOGE cuts, agency staffing levels were near record lows as the number of Baby Boomers aging into the system continues to climb. The agency has shifted primarily to an appointment system, recommending that people schedule in-person help rather than walk in if their business can’t be conducted online or on the phone.

“If it becomes even harder to reach Social Security, people who need to correct errors or want to make changes such as switching to a different bank account may not be able to do so,” says Nancy Altman, president of Social Security Works, an advocacy group. “We are also worried that mistakes, including over and underpayments, could become more common—and harder to correct.”

A Social Security Administration spokesperson referred Barron’s to the agency’s contingency plan, which shows that about 12% of its 51,825 staff are expected to be furloughed in the event of a shutdown lasting five days or less. The plan outlines essential functions including sending out Social Security checks, disability checks and SSI welfare checks, processing benefit applications, and issuing new and replacement Social Security cards. Among the functions that would cease are making benefit verifications and processing overpayments.

Workers expected to be furloughed during a short shutdown include nearly 1,500 frontline workers who provide customer support.

Under commissioner Frank Bisignano, former CEO of payments company Fiserv, the agency has touted technological upgrades that have shortened phone wait times, among other improvements. Critics say these some of these gains are driven by AI bots that aren’t able to resolve many inquiries, leading to callers’ frustrations.

The Social Security Administration did not respond to Barron’s request for comment about what some observers have called a deterioration of customer service at the agency.

The shutdown deadline coincides with the end of paper Social Security checks, part of a broader government modernization effort. Over the summer, the agency urged the small number of beneficiaries still receiving paper checks to set up electronic delivery. Yet those who have been unable to do so might get caught up in the shutdown and have trouble quickly fixing the issue, Altman says.

Late Wednesday, the Office of Management and Budget ratcheted up the stakes of a shutdown by directing federal agencies to use the opportunity “to consider Reduction in Force (RIF) notices for all employees in programs, projects, or activities” that satisfy certain conditions. These would be permanent job cuts, in addition to the temporary furloughs that happen during shutdowns.

The Social Security Administration did not respond to a request for comment on how the agency might respond to the OMB directive. A senior administration official told Barron’s that the continuation of Social Security benefits remains a priority for President Donald Trump.

The last government shutdown was also the longest to date, lasting for 35 days during the first Trump administration from the end of 2018 into 2019, according to a strategy note from Macquarie.

Write to Elizabeth O’Brien at elizabeth.obrien@barrons.com