Social Security checks in danger, officials say White House links loss of payments, debt ceiling


WASHINGTON -- Trying to pressure the Republican Congress, the Clinton administration is warning 43 million Social Security recipients that they won't get their March checks unless Congress increases the debt ceiling.

In his State of the Union address Tuesday night, President Clinton urged Congress to approve an increase in the debt limit "on behalf of all Americans, especially those who need their Social Security payments at the beginning of March."

And yesterday, his chief of staff, Leon E. Panetta, said, "You're not going to see Social Security checks go out."

But the Social Security system each month collects $5 billion more than it needs to cover pension and disability checks, raising questions about whether a failure to raise the debt limit would prevent payment of the benefits.

Still, administration officials insisted yesterday that the complexities of the law and financial practices prevent them from paying benefits in March without an increase in the debt ceiling.

Analysts dismissed the threat as political rhetoric.

"That's kind of a scare tactic," said Bruce D. Schobel, a New York Life Insurance Co. vice president and former actuary for the Social Security Administration. He said there are several ways that Treasury Department officials could get around the problem, including simply holding on to Social Security payroll-tax revenue received in February and using it to finance the March checks.

Suggesting, too, that a way could be found to pay beneficiaries, Henry J. Aaron, the director of economic studies at the Brookings Institution and an official of the Carter administration, said, "It seems to me that the Clinton administration has decided that this shouldn't go on, and they're going to force the issue."

Administration officials also said this week that veterans, railroad retirement, civil service retirement, military retirement, military active-duty pay and certain Medicare and low-income housing payments due in March would be in jeopardy.

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