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    The Week

    No Social Security checks: Is Obama bluffing?

    The Week – Wed, Jul 13, 2011

    The president warns seniors that their benefits could dry up in early August if Democrats and Republicans don't strike a deal on the debt ceiling soon

    If Congress doesn't raise the debt ceiling by Aug. 2, the U.S. Treasury will run out of cash to pay all of its bills, forcing the government to start making some huge cuts. President Obama said Tuesday that Social Security payments could be one of the casualties. "I cannot guarantee that those checks go out on Aug. 3 if we haven't resolved this issue," the president told CBS News. "There may simply not be the money in the coffers to do it." Furious conservatives immediately accused Obama of "fear-mongering," while liberals said it was high time Obama "threw down his ace in the hole" to kick-start stalled deficit talks. Is Obama bluffing?

    Obama played the wrong card: I get why Obama wants to "scare retirees" to get his deal, says Andrew Biggs at the American Enterprise Institute. But he picked a weak "stick with which to beat congressional Republicans." Social Security is protected, with both its own dedicated tax and a trust fund holding $2.6 trillion in Treasury bonds. Even if the feds have to triage payments in the face of a cash crunch, under the 14th Amendment, Social Security is constitutionally in the "first tier of creditors, along with Wall Street and the Chinese." Retirees need not worry.
    "Would Social Security benefits be cut if the debt limit is not increased?"

    Actually, the president is right: As conservatives used to point out, under Supreme Court precedent there's "no legally enforceable right to Social Security benefits," says David Frum at FrumForum. That means grandma is at "the back of the line" when the spending ax falls, along with the unemployed and "soldiers in the field." So ironically, while the GOP plays its "bizarre game of threat and counter-threat," Obama's actually "channeling 100 percent classic conservative theory." Retirees' checks may indeed be in jeopardy.
    "Social Security checks are not guaranteed"

    Social Security may be the least of our worries: The fight over whether Obama is fear-mongering here is almost beside the point, says Doug Mataconis at Outside the Beltway. If Congress is "stupid and irresponsible" enough to ignore the debt ceiling, the "immediate need to cut federal spending by 44 percent" would very quickly "suck more than a trillion dollars of liquidity out of the economy." Whether or not seniors miss a check, the private sector would take a huge hit.
    "Even if there's no default, there will still be pain"

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    710 comments

    • 3C-PO
      3C-PO  •  10 mths ago
      Go ahead and give "Obama the Terrorist" his debt ceiling increase through election time. His chances of gettin in are nil after this stunt. Remeber the definition of "terrorist" is to "invoke fear amongst people for a political cause"...Why is he not impeached already ? The Senior Citizens of this country deserve better than his act of terrorism.
    • A grain of truth
      A grain of truth  •  10 mths ago
      Senior citizens are understandably concerned about their social security benefits being interrupted in connection with current debt ceiling negotiations taking place, based on comments attributed to certain Federal elected officials. The short answer is that they should not be. Unless the Managing Trustee of the Social Security Trust refuses to perform his fiduciary duty, they should have no fears of their benefits not being timely paid. Presently, approximately 95-98 cents of the benefits dollar are funded by current payroll tax collections, plus a PORTION of current interest earnings making up the balance. Some people are attempting to make the case that if there is a "default", the presumed interest earnings shortfall would cause the trustee to be unable to issue benefits checks. However, this claim is not quite true. Excess funds from the past (those funds Congress "invested") are secured by federal securities structured similar to a T-Bill. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds. In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. The Trustee presents securities to the Federal Reserve Bank in the amount necessary to provide full benefits and all beneficiaries are paid from the combined proceeds. The Federal Reserve Bank has the ability and means to redeem the securities. The Managing Trustee of the Social Security Trust Fund is the Secretary of the Treasury. The Secretary, as Trustee, has a fiduciary duty to see to it that benefits are caused to be paid.
    • xx
      xx  •  10 mths ago
      The cut off should be started with+
      1-Congress
      2-Whitehouse
      3-Government payroll
      • Jim Long
        Jim Long 10 mths ago
        let's put wall street in #3 they are loaded with cash from hoarding bailout funds
      • Robt G
        Robt G 10 mths ago
        Remove Wallstreet, WH first, Gubbimint payroll second, congress third, but order does not matter, all at the same time. They all say they are public servants! B.S., they are all paid profeesional of the oldest trade known to man.
      • Nga
        Nga 10 mths ago
        The temptation in the WH government is overloading, we paid our Federal and States taxes, they spend all, we paid social security taxes, it is our taxes for the retirement, they have been spending it, now they want to cut SS check, if this happen, we need to organized for demonstration. My concerning is the generation Y might not have money for retirement.
    • Kevin02
      Kevin02  •  10 mths ago
      If the seniors don't get their social security neither should the Senators, Congressman, President, or any other elected official we elected to take care of our business.....the people should be taken care of before the elected officials are....how long do you think it would take to get those check in the mail then?
      • flyby
        flyby 10 mths ago
        I agree. The first checks on the chopping block should be the elected officials who don't have enough sense to even pass a budget, let alone live on one.
      • Dudenohair
        Dudenohair 10 mths ago
        Hey flyby, the last Congress (democratically controlled) was the first congress in history to not bother to pass a budget as was their constitutional duty.
      • terry
        terry 10 mths ago
        both parties have heads up their @$$es
    • Idiot_Savant
      Idiot_Savant  •  10 mths ago
      If a single payment is missed, and foriegn aid continues to be dispensed, it should tell all of you idiots (democrat & republican) the truth about all of your elected representatives...
      • george w
        george w 10 mths ago
        Idiot_Savant is right-on! Foriegn aid should stop immediately and if we ever get back on our feet any aid to a country should be examined on a case by case basis with the the understanding of "what have you done for us lately?"
      • Jack
        Jack 10 mths ago
        The amazing thing to me is that we give out foreign aid at all when we are borrowing 40 cents for every dollar we spend. What are we doing giving it away and then borrowing it back? How about all the money raised by politicians for their re-election goes directly to pay down the debt instead of campaign ads, then I could vote for them and feel good about it
      • mrs34
        mrs34 10 mths ago
        And Obama has promised Brazil millions so they can drill off shore and "will be nice enough to sell us their oil." Our own drillers are out of work and can't drill here. But we can shell out gazillions for wind mills.
    • YOLANDA V
      YOLANDA V  •  10 mths ago
      My mother who is 87 years old depends on her small social security check to live on! That is the only income she has coming in to her. I can only imagine the many people that depend on that check to cover any costs that they have to survive with. Wouldn't that just put more people without and also have the economy get worse? Please don't let this happen, especially to our elderly! It seems that we are always helping other countries when ever there is a disaster, where does that money come from. Maybe we should just start worrying about our country, since we have so many people without jobs and people that are living in poverty. I know President Obama came in at a time that our economy was at it lowest, but we need to get things moving forward. Republicans and Democrats need to unite to save this country!
      • Lili Q
        Lili Q 10 mths ago
        But as long as President Obama and his staff and his wife and her staff and all their financial supporters are paid first, that's what really counts
      • John H
        John H 10 mths ago
        My parents depended almost entirely on Social Security and barely ecked out a survival where they could save their pride and feel they were pulling their own weight. In the end, they were forced to accept something from all their children but always looked at it like a loan and not a gift. They did what they could to pay us back even though we didn't want it. If Social Security goes down the tubes, some will have to move in with children. Others who have no children will have to live on the streets. Way to go elected officials.
      • my two sense
        my two sense 10 mths ago
        obama isn;t over the ss and has no buisness even saying such crap he just thought he would scare the republicans into giving in and you see how he walked out because it didn;t work so yea call his bluff and kick him in the seat of his pants
    • Jo-Ann
      Jo-Ann  •  10 mths ago
      My huband just passed away in January, which already cuts my income one thousaand dollars monthy..Have had mtn of paperwork and trying to get a hold on what monies I can hopefully count on to do my budget, which by the waY WE HAVE KEPT FOR THE ENTIRE 56 YRS. WE WERE MARRIED. AND NOW I HAVE TO GET SOCKED IN THE STOMACH WITH WORRY AS TO WHETHER I WILL RECEIVE FUTURE S.S.CHECKS NEEDED FOR MY LIVLIHOOD. THIS IS TOTALLY WRONG!!! SOMEHOW THE S.S. MONIES SEEM TO HAVE BEEN TO PUT IT N COMMON TERMS JERKED AROUND OVER MANY YEARS.....IT IS ONE FUND WHICH I BELIEVE SHOULD BE HELD IN HIGH REGARD AS IT REPRESENTS MEN, LIKE MY HUSBAND WHO WAS IN SERVICE FOR T HIS COUNTRY-FAMILY MEMBERS LIKE MANY OF US HAVE WHO CANNOT WORK DUE TO HONEST HEALTH PROBLEMS (INCURABLE AT THIS TIME IN HISTORY). LOOK AT THE SIZE OF THE CENTRAL GOVERNMENT RIGHT NOW AND SOME OF THE HIGHER SALARIES OUR REPS. AND SENS., ETC; AND CONSULTANTS MAKE...WHY IS IT THE BOTTOM IS ALWAYS CHOSEN TO DO WITHOUT PUT FIRST INSTEAD OF STARTING WHERE THE LACK OF RESPONSIBILITY IS SITUATED. THIS PROBLEM HAS BEEN HANDED DOWN FROM ONE GENERATION OF POLITICIANS TO ANOTHER AND BECAUSE IT WAS TOO MUCH WORK OR BECAUSE SOME MIGHT HAVE FOUND A WAY TO PRIOFIT BY LETTING IT SLIDE IT HAS COME TO THIS - - - I SAY NO! WHEN I THINK OF HOW MUCH MONEY HAS BEEN SPENT ABROAD AND NOT JUST THIS WAR BUT EVEN BETWEEN TIMES WHILE WE SIT ASIDE STILL HOPING THAT THE PEOPLE WE ELECTED HAVE SOME CARING AND HEART FOR US..//THIS IS CHALLANGING OUR VERY EXISTENCE....WHY SHOULD I HAVE TO ASK FOR MERCY FROM THOSE RECEIVE SALARIES FROM OUR TAXES????IT IS A BELITTLING INSULT.AND HURTS.
      THANK YOU FOR THIS SPACE ..
    • Betty
      Betty  •  10 mths ago
      For us elderly who depends on S.S.-will we be living on the streets-all the money they made & helping foreign countries & letting all the illegals come in & take the americans jobs & most of those foreigners get free medical & housing ..what's wrong with this world..what kind of senates and congressmen do we have & still get their same pay- Us retirees haven't even gotten our small raise in 3 yrs..Do they just think because we're elderly, they want us to dry up & day...
    • Doloris
      Doloris  •  10 mths ago
      Why do they have to cut SS ,why not make all the high paying Goverment pay for their own Insurance and cut their spending useing tax payers money to pay for thier vacation. I bet they go to lunch and we pay for it too. Who knows what else we pay for them it all boils down to the goverment spending and then we get the dam cut . if this is the case we should not have to put in for SS any more why pay into it if we are not getting it back.
    • Jim C
      Jim C  •  10 mths ago
      Ok now, those that voted for this Idiot feel better now???
      • RW
        RW 10 mths ago
        All those who voted for the moron tea-baggers feel better now?
      • bobs
        bobs 10 mths ago
        we need all teaparty govt to straighten out his obumbler mess
      • Ronald
        Ronald 10 mths ago
        Yes I do feel better voting for a teabagger. Alot better than a liberal demorat.
    • THX-1138
      THX-1138  •  10 mths ago
      It seems that many people posting here are not educated on the meaning and understanding of party ideologies. I see some, mostly appears to be non-democrats, who frequently use the words Fascist and Communist in the same sentence to describe the same person. Fascism is an extreme Right-wing philosophy and Communism is an extreme Left-wing philosophy. Another misconception is Democrat vs Republican platform ideologies. Social Security has for a very long time been a program that Republicans want to either privatize and place the funds you have been paying not into a government system but into a Corporate stock system or to cut it completely. So when I see people get hostile over social security being changed, cut, or threatened in anyway and they are Republican, I have to wonder what they think their party is really about. Makes no sense to me.
    • Mikey
      Mikey  •  10 mths ago
      I think it is time to start impeaching people on the seats, if SSI stops i will have tow weeks to live with out kidneys, if it comes down to this i am not going to be dieing alone i will take people with me even if i have to start at the TOP be leave me i will not die alone......
    • SO WILD ABOUT
      SO WILD ABOUT  •  10 mths ago
      Only in America can the government STEAL your retirement money and then call 'YOU' an 'ENTITLEMENT' because you want it back.
    • A Yahoo! User  •  10 mths ago
      If I don't get my ss check how am I going to eat or keep my home? Are they saying it's better to have millions of seniors homeless and starving to death on the street? What has become of this country?????
    • Peter
      Peter  •  10 mths ago
      Obama thinks he can lay this on Republicans. Invent a crisis. Blame it on Republicans. Win the election. This time I don't think he will get away with it. The people have seen Obama for what he is; a heartless, mean-spirited partisan who has no understanding of the American economy or the individual freedom that allowed this country to be great. Everything he does and says is contrary to the interest of the United States and its people. He deserves nothing less than total defeat for him and his party.
    • Eileen
      Eileen  •  10 mths ago
      Think back to the arguments of who were the "elitists" in Washington. Obama in my view is included in that title,, he has NO IDEA of what or how the "common" person in our country has to live. As a middle class citizen who is on disability because of MS, I know many who have fought and fought hard for years for the check they get. Some live on 600 dollars a month. We worked for years, we paid our taxes, we paid our dues yet somehow the faithful of citizens are the ones to get screwed. What about our veterans? Those checks from what I understand will be held too. Above all, our veterans should never be the ones to sacrifice. Haven't they sacrificed enough? How our citizens are NOT taken care of makes me sick!!!!
    • Free2BiteMe
      Free2BiteMe  •  10 mths ago
      The Social Security Trust fund is not broke yet. Some estimates are that it will be broke in about 6 years. This means that there is enough revenue through FICA taxes to cover ss payments for the near future. The politicians have bee raiding the funs for years to pay for pork projects and the like. Other things wont get paid but ss will. So, as usual, the president is lying, again for political purposes.
    • SO WILD ABOUT
      SO WILD ABOUT  •  10 mths ago
      I told everyone to do a fact check.Social Security is 'NOT' in the General Fund and does 'NOT' count towards the National Debt figures.It is 'NOT' an 'ENTITLEMENT' but a 'TRUST FUND' and the United States Government has borrowed over 2.6 TRILLION dollars from the fund.Time to 'CALL IN THE NOTES' & call his BLUFF !
    • Donald
      Donald  •  10 mths ago
      It's time to start impeachment procedings....and look for what charges we can bring against the members of Congress. This is playing out like an old silent movie....I don't think that any of these gus are serious. By the way, the federal income is enough to pay any interest payments due.
    • John J.
      John J.  •  10 mths ago
      I think Mr. Barack Housein Obama is using a lot of stuff,including scare tacticts just to gain political prestige to insure that he gets more votes and money to support his running for a second term in2012.When he starts messing with the only thing that the poor people and retirees have left,their Social Security Checks,he will lose more votes than he can comprehend.The majority of the working class people and retirees are not as well financially fixed as he and all the fat cats in DC,that are living high on the hog off our hard earned tax money,Even we retirees have to pay taxes on our meager Retirement Checks and SSI income.The poor people of this nation highl out number the rich and crime snyndicates that bought him into office in 98.
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