Will Social Security checks go out on August 3? Probably not, unless there is an agreement on an increase in the debt ceiling. Let me lay out where the problem with doing that lies.
Eric Cantor, the House Majority Leader, that is the second ranking Republican in the House of Representatives after John Boehner, the Speaker of the House of Representatives said yesterday that “Currently, there is not a single debt limit proposal that can pass the House of Representatives." The reason he said this is that he knows that a debt ceiling bill that only reduces spending without any tax increase must pass the House of Representatives solely with Republican votes. Nancy Pelosi, the House Democratic leader has said as much. Cantor cannot count on all or even most Republicans in the House to vote for anything that is on the table at the moment. There are many Republicans in the House who have pledged not to vote for any increase in the debt ceiling under any circumstances and many others who say they will vote for a debt ceiling increase only if Democrats agree to enormous cuts in expenditures without any tax increases even though the President would veto such a plan if it ever passed the Senate, which it would not.
You can view this situation in differing ways depending upon your political views but something has to give. Either Democrats must cave completely or some extraordinarily rigid Republicans in the House of Representatives must cave. Complicating matters is the belief among many Republicans that nothing serious will happen if the debt ceiling is not raised by August 2. They think that they are being lied to, that the Treasury can continue to pay bills after August 2, or that the Treasury's failure to pay bills won't be that big as deal as long as bondholders are paid or that the only bills that won't get paid by the Treasury are bills for things like Medicaid and Food Stamps that they would prefer not get paid. This is all rubbish as more reasonable voices on the right acknowledge.
I am getting the feeling that we are not going to get agreement until something dramatic happens. My guess is that the dramatic event will be the stock market going into a tailspin with the Dow losing 1,000 points or more in a day. Such an event cannot be that far off.
7 comments:
The ugly truth is that there are some in the House who would actually be happy to see an economic collapse. It would fulfill their paranoid fantasies and allow them to blame the collapse on the President.
They have short memories and somehow believe the American people would blame the President for this, despite the fact that history shows the American people are smart enough to properly sort out the blame in situations such as this. Boener is smart enough to realize this would come back to bite the GOP, but his own caucus won't listen to him.
The dramatic event(s) would be the Social Security checks not going out in August. If that were to happen, the voters (mainly the elderly) would scream bloody murder, regardless of their party affiliation. Maybe that would be a loud enough of a wake-up call for the Republicans.
Only reason Social Security checks would not go out is if Obama chooses to not have them go out as part of his battle with the GOP.
http://www.foxnews.com/opinion/2011/07/14/is-obama-crazy-enough-to-not-send-out-social-security-checks/
The agency instructed employees today to answer questions as to whether a failure to raise the debt ceiling will effect Social Security payments. The official agency response to the questions is, I kid you not:
"We don't know".
Anon 6:09pm:
You can't spend money that isn't there. The trust funds don't have a penny in real money in them - just special treasury securities. In the case of a default, Treasury wouldn't have the authority to borrow any money to redeem the IOUs owed by the government to the trust funds to pay benefits.
Posting a Fox "news" link is evidence enough that the previous poster has limited credibility. Do you really think that Obama would deny sending out checks if he didn't absolutely have to? It would be political suicide. Unlike the Teabaggers, the guy at least has a brain.
ANON 6:14 PM
If you are so confident that anything published on the FoxNews website is worthless and Obama would never say Social Security checks might not go out if it was not a real risk, then prove that the information reported below is false.
Consider Obama’s words: “I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it.”
To people who rely on Social Security to put food on the table and a roof over their heads, that’s an awfully reckless thing for a president to say. It’s also false, because Obama can guarantee Social Security checks go out. In fact, it is entirely in his hands.
To start with, let’s be crystal clear that there is zero legal or practical reason for Social Security checks to be implicated in the debt ceiling debate. Social Security checks have continued to go out in previous protracted episodes when the debt ceiling was reached in 1985 and 1996. Moreover, in 1996 Congress passed a law amending the Social Security Act to specifically allow Social Security payments to continue to be made when the debt ceiling is reached. The legal mechanism: redeeming the Social Security trust fund bonds (money the general fund owes to Social Security) by issuing debt to the public. Since both types of bonds are included under the legal debt limit, this does not incur any new debt that would breach the ceiling.
In addition, every single Senate Republican voted for the Toomey-Vitter amendment months ago to guarantee that debt service payments and Social Security would be prioritized over all other government outlays in the event the debt ceiling is reached. Democrats – wanting to keep doomsday on the table as a reckless negotiating tactic – voted no. The House may soon vote on even more comprehensive legislation that would guarantee essential programs are prioritized and that reaching the debt ceiling would result in no worse than a partial shutdown of the federal government.
Whether or not Congress passes new legislation, the president and Treasury Secretary Tim Geithner already have the legal authority to prioritize payments and to guarantee that bondholders are paid – avoiding a default – and that Social Security checks go out on schedule. Neither of those doomsday scenarios should be the focus of the ongoing debate.
To the extent Obama insists on threatening not to send Social Security checks, it’s critical that the public understand he is using seniors as pawns in his ongoing attempt to avoid confronting Washington’s spending problem and instead slam the economy with tax hikes that will make our economic challenges even greater.
The American people are sick of cynical scare tactics as a cover for Washington tax-borrow-and-spend as usual. Before we even consider allowing the federal government to accumulate even more debt for our children and grandchildren to pay, Congress needs to show a serious commitment to putting us on a path to a sound fiscal future.
They’ll have a great chance next week when they vote on the balanced budget amendment to the Constitution. But I suspect the best opportunity won’t come until August, when Obama backs down from the crazy threats, allows Social Security checks to go out, and finally starts to get serious about cutting spending.
Phil Kerpen is vice president for policy at Americans for Prosperity
This this outrageous, all you guys like to do is take from us Americans. Why don't you all take a huge pay cut and stop wasting money on stuff that isn't needed like all the sidewalks in everett your redoing when nothing was wrong with them, adding the new bridge in east boston making it bigger instead of fixing the orginal one that's waste of money. Instead of wasting money on stupid Sh*t why don't you consider making a game or club place in every so many citys in & around boston to give young children a place to go and hang out & play instead of hanging on the streets killing each other or selling drugs. Oh no wait their not the goverments kids so you don't care long as your kids have their mom & dad making bigg mmoney & buying new cars ,new clothes & stuff like money grows on trees what about us very low income people who can't get anything for our kids. Like me I'm a young disabled mother of two ages 4 & 5 on social security and can't afford to buy things because my income goes straight to rent & bills and have to tell my kids sorry we don't have extra money if the need or want something, an unlike me because I'm america I can't get section 8 or rent help cause all these non americans taken from us & lying about being poor getting all the benefits the housing & drive 20,000 dollar cars come one. If you cut social security benefits hope the goverment has plans and money to help us very low income people get housing when where homeless with kids because we can no longer afford rent. I live off like 1300 amonth between ssi & welfare and rent is 1200 a month I have oil gas lights cable & phone bill along with supporting two minors struggling everyday cause I can't get help. This goverment is messed up . Why don't you guys cut your pay in half and give back to us americans instead of taken from us so you all can sit back with your feet up getting waited on hand and food. Sorry there's families out there like me that wasn't handed the golden sppon like you. Wake up & help us don't take from us when we are the ones in need, try walking one month in my shoes & see how it is to struggle or hear you kid cry there shoes hurt them or they see someone with a new toy or clothes and ask why can't they have it too.
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