Debt-limit delay would jeopardize Social Security payments

[MikeK]

The guy that wrote that is an idiot, or lying to scare people. Social Security is a separate governement fund that is independent of the general fund.

If that's true, why is Social Security included in the August default threat? I believe the Social Security Fund is a fund in the rhetorical sense and the S.O.B.s in Congress have spent or stolen every nickel of the FICA contributions.

(Excerpt)

WASHINGTON — Social Security payments to millions of retirees and people with disabilities could be threatened if President Obama and Congress can't agree to increase the government's debt limit by Aug. 2, a new analysis shows.
Debt-limit delay would jeopardize Social Security payments - USATODAY.com

(Close)

It is included because the government owes the Social Security trust fund a lot of money. That does not mean that the government will stop paying Social Security if we do not raise the debt limit, it just means the administration will have to cut something else that is not part of the actual money the government owes.

I hope you're right.

 

[Flopper]

As is the other $12.5 trillion owed by the Feds.

the primary difference being that the Federal government can elect to CHANGE the terms of payment to the Social Security recipients, but it cannot change the terms of repayment to the other holders of US debt.

So think about the implications of that, folks.

The people are forced lend our government money (in the form of SS payments) without any guarantee of repayment.

But when big capital freely elects to lend the FED money, their loans come with irnoclad guarantees of repayment.

Nice scam, huh?

Now I know that a lot of you guys think it okay to cut back on repayment of social security.

But think about what you're really doing.

You are telling us that you care more about some fucking international banker's rights, than you care about your own fellow citizens and next door neighbors.

Now seriously, tell me again about how much you guys love this nation?

Very good point. Unlike bond holders who invested and assumed the risks associated with any investment, our seniors made no such choice. They were forced to contribute to the trust fund which the government is holding in trust for them. The trust fund belongs to those who contributed to it, not the government.

If held in trust, then why are they borrowing money to make payments from it?

There are no funds held in trust... it all goes into the GF and is spent.

The trust did not borrow money. It redeem treasuries to cover a 7% deficit caused by a temporary reduction in employee's contribution from 6.1% to 4.2% and the lower payroll tax collections. The government borrowed money by issuing treasuries to cover the redemption. The trust fund does not borrow money because it has no need to do so. It simply redeems treasuries it owns.

The trust fund is not part of the budget and it's separately managed from other government accounts. IF there is no money in the Social Security Trust Fund, then there is no money in money market funds or any funds that are fully invested in treasuries.

 

[oreo]

washington — social security payments to millions of retirees and people with disabilities could be threatened if president obama and congress can't agree to increase the government's debt limit by aug. 2, a new analysis shows.

Although the treasury department likely could avoid delaying social security checks, the analysis by the bipartisan policy center points up the depth of the cuts that would be needed if the $14.3 trillion debt ceiling isn't raised.

It shows that in august, the government could not afford to meet 44% of its obligations. Since the $134 billion deficit for that month couldn't be covered with more borrowing, programs would have to be cut.

If social security, medicare, medicaid, unemployment benefits, payments to defense contractors and interest payments on treasury bonds were exempt, that would be all the government could afford for the month. No money for troops or veterans. No tax refunds. No food stamps or welfare. No federal salaries or benefits.

Want to protect the social safety net? That would be possible — but only if treasury stopped paying defense contractors, jeopardizing national security. Plus virtually every federal agency and employee.

"we should be honest with ourselves what this would be like, and the answer is it would be chaotic," said jay powell, a former top treasury official in president george h.w. Bush's administration. "there is no way to avoid really serious pain."

the bipartisan policy center studied treasury department receipts and spending for august 2009 and 2010 and found that the government likely would not have enough revenue to make the full $23 billion payment to social security recipients due aug. 3. That's the first wednesday of the month, when a majority of social security and supplemental security income checks go out.

Things wouldn't improve much as the days pass. The first major interest payment to creditors would be due aug. 15 — $29 billion, more than the $22 billion due to arrive in revenue.

On that day, treasury would have to roll over nearly $500 billion in maturing debt — necessitating an auction which, by that time, might have fewer takers than usual. If demand declines, interest rates would rise.

As the center foresees it, the picture would get worse: Layoffs and lawsuits. Global market reaction and media glare. A possible downgrade in the u.s. Credit rating, perhaps followed by the loss of market access.
The effect on the country, said former republican senator pete domenici of new mexico, would be "irretrievable."

debt-limit delay would jeopardize social security payments - usatoday.com

here come the scare tactics.

 

[Flopper]

Hi Flopper, right you are. I really think that Schumer was right when he said that the GOP was possible holding back so they could get Obama. I think there have been tons of people that have been thinking the same thing but nobody wanted to be first to say it.

This is all about votes. Let's pray they don't succeed in bringing down the government.

There seems to be a growing number of right wing radicals that believe the government must be destroyed before it can be saved. That's why the right is not concerned about a second recession.

Then why is the Left so actively working to prolong their abysmal economic downturn?

They are certainly not working to prolong the downturn. Poor performance of the economy will hurt the Democrats in 2012 and help the Republicans.

 

[Toro]

It is included because the government owes the Social Security trust fund a lot of money. That does not mean that the government will stop paying Social Security if we do not raise the debt limit, it just means the administration will have to cut something else that is not part of the actual money the government owes.

Actually, it does mean that SS checks may not be sent out, at least on time.

Particular August days will be far worse than the monthly totals suggest. For example, on Aug. 3, we project that the government will have about $12 billion in receipts and $32 billion in committed payments, including a $23 billion Social Security payment. And Aug. 15 presents a triple threat: a $19 billion daily deficit, a $29 billion interest payment and a quarterly refunding auction to pay off a maturing $27 billion bond.

Opinion: Real implications of debt debate - Jerome H. Powell - POLITICO.com

The government has to send out $23 billion in SS checks on Aug 3. If we hit the debt ceiling on Aug 2, the government will only have $12 billion in revenues. Thus, at the very least, SS checks will be delayed, if not worse.

The good news is that receipts may be picking up, and the debt ceiling may be pushed back to August 22.

If that happens you will know that it was a decision made by the Obama administration. He has broad legal authority to restructure payments and prioritize who gets what. He can easily pay SS and stop paying something else. If he is actually willing to step up to the plate he can shut down half the government and use the savings to pay whatever he wants.

Enjoy blaming the Republicans though.

Apparently you missed the part about having $12 billion to pay $23 billion in SS. It's not a choice.

So, if the Democrats are offering to reduce the deficit by having 70%-80% spending cuts and 20%-30% tax increases, and the Republicans are saying it has to be 100% spending cuts and nothing else, yes, I will blame the Republicans for being stridently intransigent. If anyone is saying "It has to be 100% my way and under no circumstances am I going to consider your position," they are part of the problem.

BTW, where do you see that Obama has broad authority to restructure payments? I've read that it is the Treasury which has the authority, not the White House.

 

[Quantum Windbag]

Actually, it does mean that SS checks may not be sent out, at least on time.

Opinion: Real implications of debt debate - Jerome H. Powell - POLITICO.com

The government has to send out $23 billion in SS checks on Aug 3. If we hit the debt ceiling on Aug 2, the government will only have $12 billion in revenues. Thus, at the very least, SS checks will be delayed, if not worse.

The good news is that receipts may be picking up, and the debt ceiling may be pushed back to August 22.

If that happens you will know that it was a decision made by the Obama administration. He has broad legal authority to restructure payments and prioritize who gets what. He can easily pay SS and stop paying something else. If he is actually willing to step up to the plate he can shut down half the government and use the savings to pay whatever he wants.

Enjoy blaming the Republicans though.

Apparently you missed the part about having $12 billion to pay $23 billion in SS. It's not a choice.

So, if the Democrats are offering to reduce the deficit by having 70%-80% spending cuts and 20%-30% tax increases, and the Republicans are saying it has to be 100% spending cuts and nothing else, yes, I will blame the Republicans for being stridently intransigent. If anyone is saying "It has to be 100% my way and under no circumstances am I going to consider your position," they are part of the problem.

BTW, where do you see that Obama has broad authority to restructure payments? I've read that it is the Treasury which has the authority, not the White House.

Apparently you missed the point where he can divert other assets to deal with it. It is a choice.

Something else you are missing. So far the Democrats have fought tooth and nail over cuts in increased spending. I have no idea what Biden's little conflab produced, but any tax increase before their are significant cuts in real, not projected, spending is unacceptable. If you want tax increases we need to go back to the last budget that was passed, which was the 2009 budget, cut the spending in that to the bone, and then we can talk about increasing taxes, if you can make an argument about it actually being needed to preserve the core functions of the government.

In case you missed the memo, the treasury is part of the executive branch, and ultimately answers to Obama. Any authority the treasury has ultimately comes from Obama, not from themselves. That is the way our government actually works.

 

[Toro]

If that happens you will know that it was a decision made by the Obama administration. He has broad legal authority to restructure payments and prioritize who gets what. He can easily pay SS and stop paying something else. If he is actually willing to step up to the plate he can shut down half the government and use the savings to pay whatever he wants.

Enjoy blaming the Republicans though.

Apparently you missed the part about having $12 billion to pay $23 billion in SS. It's not a choice.

So, if the Democrats are offering to reduce the deficit by having 70%-80% spending cuts and 20%-30% tax increases, and the Republicans are saying it has to be 100% spending cuts and nothing else, yes, I will blame the Republicans for being stridently intransigent. If anyone is saying "It has to be 100% my way and under no circumstances am I going to consider your position," they are part of the problem.

BTW, where do you see that Obama has broad authority to restructure payments? I've read that it is the Treasury which has the authority, not the White House.

Apparently you missed the point where he can divert other assets to deal with it. It is a choice.

Something else you are missing. So far the Democrats have fought tooth and nail over cuts in increased spending. I have no idea what Biden's little conflab produced, but any tax increase before their are significant cuts in real, not projected, spending is unacceptable. If you want tax increases we need to go back to the last budget that was passed, which was the 2009 budget, cut the spending in that to the bone, and then we can talk about increasing taxes, if you can make an argument about it actually being needed to preserve the core functions of the government.

In case you missed the memo, the treasury is part of the executive branch, and ultimately answers to Obama. Any authority the treasury has ultimately comes from Obama, not from themselves. That is the way our government actually works.

I would agree that if the Democrats are proposing that spending reductions are completely off limits, they are as much of the problem as Republicans who are saying that there will be zero tax increases. But that apparently isn't what is being offered.

even if Obama were to gain all of the tax-law changes he wants, new revenues would make up only about 15 cents of each dollar in deficit reduction in the package.

An agreement by the Republicans to accept any new revenues would be a political victory for Obama because "no new taxes" has been such an article of faith for the GOP.

House Speaker John Boehner (R., Ohio) is aware that he will likely need Democratic votes to pass a deal, much as he did earlier this year to avert a government shutdown, and that may require adding sweeteners. But substantively, budget experts note, the plan would still be dominated by cuts to government programs, many of them longtime Democratic priorities, such as Medicaid and federal pensions.

GOP poised to prevail on spending cuts | Philadelphia Inquirer | 07/03/2011

So if the Democrats are offering 85% on the spending side and the GOP are saying it has to be 100%, if the government shuts down, I blame the Republicans. My guess is that the majority of people will also, since the majority of people want tax increases to be part of the solution.

Of course, some compromise will be reached where there will be tax increases by closing loopholes. Boehner's not stupid. The new Tea Party crowd in Congress will oppose it, even just to save face. But I imagine there will be some sort of compromise since the country won't stand being held hostage by a stridently ideological and uncompromising minority.

 

[Flopper]

Actually, it does mean that SS checks may not be sent out, at least on time.

Opinion: Real implications of debt debate - Jerome H. Powell - POLITICO.com

The government has to send out $23 billion in SS checks on Aug 3. If we hit the debt ceiling on Aug 2, the government will only have $12 billion in revenues. Thus, at the very least, SS checks will be delayed, if not worse.

The good news is that receipts may be picking up, and the debt ceiling may be pushed back to August 22.

If that happens you will know that it was a decision made by the Obama administration. He has broad legal authority to restructure payments and prioritize who gets what. He can easily pay SS and stop paying something else. If he is actually willing to step up to the plate he can shut down half the government and use the savings to pay whatever he wants.

Enjoy blaming the Republicans though.

Apparently you missed the part about having $12 billion to pay $23 billion in SS. It's not a choice.

So, if the Democrats are offering to reduce the deficit by having 70%-80% spending cuts and 20%-30% tax increases, and the Republicans are saying it has to be 100% spending cuts and nothing else, yes, I will blame the Republicans for being stridently intransigent. If anyone is saying "It has to be 100% my way and under no circumstances am I going to consider your position," they are part of the problem.

BTW, where do you see that Obama has broad authority to restructure payments? I've read that it is the Treasury which has the authority, not the White House.

Something few people seem to consider is when Congress fails to approve raising the debt limit or approve the budget and grants and extension, Congress is allowing the administration to make all financial decisions. The administration can decide which financial obligation will be honored, which employees will be paid, which states get federal payments, which contracts are honored etc.

 

[Quantum Windbag]

Apparently you missed the part about having $12 billion to pay $23 billion in SS. It's not a choice.

So, if the Democrats are offering to reduce the deficit by having 70%-80% spending cuts and 20%-30% tax increases, and the Republicans are saying it has to be 100% spending cuts and nothing else, yes, I will blame the Republicans for being stridently intransigent. If anyone is saying "It has to be 100% my way and under no circumstances am I going to consider your position," they are part of the problem.

BTW, where do you see that Obama has broad authority to restructure payments? I've read that it is the Treasury which has the authority, not the White House.

Apparently you missed the point where he can divert other assets to deal with it. It is a choice.

Something else you are missing. So far the Democrats have fought tooth and nail over cuts in increased spending. I have no idea what Biden's little conflab produced, but any tax increase before their are significant cuts in real, not projected, spending is unacceptable. If you want tax increases we need to go back to the last budget that was passed, which was the 2009 budget, cut the spending in that to the bone, and then we can talk about increasing taxes, if you can make an argument about it actually being needed to preserve the core functions of the government.

In case you missed the memo, the treasury is part of the executive branch, and ultimately answers to Obama. Any authority the treasury has ultimately comes from Obama, not from themselves. That is the way our government actually works.

I would agree that if the Democrats are proposing that spending reductions are completely off limits, they are as much of the problem as Republicans who are saying that there will be zero tax increases. But that apparently isn't what is being offered.

even if Obama were to gain all of the tax-law changes he wants, new revenues would make up only about 15 cents of each dollar in deficit reduction in the package.

An agreement by the Republicans to accept any new revenues would be a political victory for Obama because "no new taxes" has been such an article of faith for the GOP.

House Speaker John Boehner (R., Ohio) is aware that he will likely need Democratic votes to pass a deal, much as he did earlier this year to avert a government shutdown, and that may require adding sweeteners. But substantively, budget experts note, the plan would still be dominated by cuts to government programs, many of them longtime Democratic priorities, such as Medicaid and federal pensions.

GOP poised to prevail on spending cuts | Philadelphia Inquirer | 07/03/2011

So if the Democrats are offering 85% on the spending side and the GOP are saying it has to be 100%, if the government shuts down, I blame the Republicans. My guess is that the majority of people will also, since the majority of people want tax increases to be part of the solution.

Of course, some compromise will be reached where there will be tax increases by closing loopholes. Boehner's not stupid. The new Tea Party crowd in Congress will oppose it, even just to save face. But I imagine there will be some sort of compromise since the country won't stand being held hostage by a stridently ideological and uncompromising minority.

Again, are those actual cuts, or just reductions in planned future spending. One I will accept, the other is a joke. If the Republicans are walking out because the Democrats will not accept an actual reduction in the budget I agree with them 100%.

That is why these talks need to be held in public, no one really knows what is being proposed, all we get is what one side is claiming the other side will not do.

Until the talks are public I will just assume everyone is lying.