July 14, 2011

INVESTOR’S BUSINESS DAILY: Obama Exposes Social Security’s Big Lie.

In trying to score political points against the GOP by warning that retirement checks were in jeopardy if the debt ceiling isn’t raised, President Obama exposed the fraud at the heart of Social Security. . . . Obama beat everyone, however, with his scaremongering claim that Social Security checks are at risk if he doesn’t get his way on the debt ceiling. “I cannot guarantee that those checks go out on Aug. 3 if we haven’t resolved this issue,” he told CBS News, “because there may simply not be the money in the coffers to do it.”

Wait! What happened to Social Security’s “guarantee”? You know, the iron-clad assurance of Social Security benefits in exchange for paying into the program your whole working life? It’s something Democrats constantly talk about, particularly when attacking Republicans who propose privatizing the program.

If it were privatized, your check wouldn’t be at the whim of a President with a politicized agenda.

UPDATE: Reader Donald Gately writes:

If I was in the GOP leadership, I would go on every media outlet available, and ask “why won’t President Obama just take Social Security payments out of the lock box? Wait, what do you mean, the government has already spent that money”?

This could be a huge “teaching moment”.

Indeed.

ANOTHER UPDATE: Reader Morgan Collins emails:

Re: Donald Gately’s note about the lock box being empty.

That’s true enough in the sense that the lock box is full of debt the government owes itself. But in event of reaching the debt limit the lock box debt can be converted into negotiable Treasury debt (it’s a special class of debt now – intragovermental holdings) and sold if the proceeds are used to meet Social Security obligations.

The Treasury Secretary knows this. The President knows this. The executive has the authority and resources to continue to meet SS obligations even if we’re at the debt limit.

Note this is a separate calculation from the Monthly Receipts minus Priority Spending that we’ve been seeing lately. SS doesn’t need to be prioritized, and conversion of intragovernmental holdings to negotiable debt does NOT affect the debt ceiling.

The President’s scaremongering about SS checks is extremely dishonest and demagogic.

Indeed. And, say, if they’re selling off Treasury debt to pay Social Security, wouldn’t that open up some debt-ceiling headroom for dealing with other bills? Or am I missing something?

MORE: Reader Bill McConnell emails: “Lockbox or not, Social Security revenues are currently about the same as Social Security payments. What would be the logic for not issuing SS checks? I don’t think O engages his brain sometimes before he speaks. Surely that answer had not be vetted by his crack staff – no pun intended.”

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