Obama "can't guarantee" SS checks will go out.. why can't he?

[Nosi]

At the end of the day, somebody who is rightfully owed money by the government will not be paid.

The troops for example.

People on social security disability who are not elderly.

 

[Puppycow]

Rightfully owed or not, yes promises would certainly have to be broken. Troop pay specifically is not a huge number, a couple billion or so, but there are much larger segments of defense spending I'd personally give some real thought to slashing.

Problem with that idea is that government contractors have contracts.
That means that they will have to be paid eventually. The government cannot just decide to break the contract or they will go to court and the court will order the government to fulfill its obligations. In the end it will cost the government more money to break its contractual obligations or even delay payment.

 

[Emperor_Gestahl]

Problem with that idea is that government contractors have contracts.
That means that they will have to be paid eventually. The government cannot just decide to break the contract or they will go to court and the court will order the government to fulfill its obligations. In the end it will cost the government more money to break its contractual obligations or even delay payment.

The Treasury would have to decide for itself what obligations can be delayed or broken with the least overall damage, but I think it's fairly obvious that since SS can be continued with no more total debt than it takes to get pieces of paper into mailboxes the Treasury wouldn't decide to disrupt it.

 

[BazBear]

You can create a denomination of any size you like.

And yes, the President can just order money printed; He has congressional approval already because they voted both a budget and an appropriation. Lacking the ability to create debt or levy more tax, the President, I argue, has a constitutional duty to print money to pay the debts.

I agree; while he may technically violate one or more laws, Sec 4. of the 14th Amendment seems to me to make such laws unconstitutional.

Let us all hope this doesn't come to pass.

 

[John Albert]

You can create a denomination of any size you like.

And yes, the President can just order money printed; He has congressional approval already because they voted both a budget and an appropriation.

Uh, no. The president can't do that.

 

[Emperor_Gestahl]

As long as revenues > debt service the 14th amendment requires that debt be paid. The 14th is referring to the bond debt of the nation, the service of which is far surpassed by revenues at this time. In theory there is no possibility of a bond default even if the debt ceiling isn't raised because the 14th amendment would force the Treasury to prioritize debt service.

 

[Bob Blaylock]

Someone please correct me if I'm wrong, but aren't the bonds in the SS trust fund already counted in the debt? "Intragovernmental holdings"? I'm well aware of the intermediate and long-term issues with the social security system but it would appear that we can run the SS system for several years without a debt limit hike.

So have I been misinformed, or is Obama misinformed/lying?

It's the same thing that always happens in this sort of political tantrum. A spendthrift government, forced to make cuts somewhere, threatens to make cuts first where it thinks it will make the most people the angriest, in order to make the point that the people shouldn't be so quick to demand any kind of restraint in government spending.

As Obama makes this threat with one fork of his tongue, here is what he is doing with the other fork.

 

[stokes234]

It's the same thing that always happens in this sort of political tantrum. A spendthrift government, forced to make cuts somewhere, threatens to make cuts first where it thinks it will make the most people the angriest, in order to make the point that the people shouldn't be so quick to demand any kind of restraint in government spending.

As Obama makes this threat with one fork of his tongue, here is what he is doing with the other fork.

Forking hell! That is one partisan website. Do we have a left-wing equivalent?

 

[Puppycow]

Uh, no. The president can't do that.

You know what he could do though, is to sell some of the gold at Ft. Knox.

That seems like a least-bad option to me, although maybe that would not buy them much time. There's also the Strategic Petroleum Reserve.

ETA:

At a price of US$1500/oz., reached in 2011, one tonne of gold has a value of approximately US$48.22 million

The US has 8,133 tons of gold. If we sold 1000 tons of it, that would be $48.22 billion, which would buy us what? A couple more weeks maybe.

Still, there really isn't any reason not to sell it.

 

[Tricky]

While there might be money to pay the SS checks, who is going to cut them? In the past, government offices, including Social Security, tell all their workers to stay home until they can pay them again. I don't think people realize how much they rely on Federal offices. If the US goes into default, all hell will break loose, and despite their protestations, the Republicans will be blamed.

 

[leftysergeant]

Forking hell! That is one partisan website. Do we have a left-wing equivalent?

High Times?

 

[Emperor_Gestahl]

While there might be money to pay the SS checks, who is going to cut them? In the past, government offices, including Social Security, tell all their workers to stay home until they can pay them again. I don't think people realize how much they rely on Federal offices. If the US goes into default, all hell will break loose, and despite their protestations, the Republicans will be blamed.

The Treasury is free to fund the SS administration if it chooses to. I agree that it would be a big mess if we had to make the kind of immediate cuts a frozen debt limit would force, but it would cost so little to keep SS flowing (only the money needed to get the checks into mailboxes) that Treasury would be insane not to fund that given its importance.

 

[leftysergeant]

While there might be money to pay the SS checks, who is going to cut them? In the past, government offices, including Social Security, tell all their workers to stay home until they can pay them again. I don't think people realize how much they rely on Federal offices. If the US goes into default, all hell will break loose, and despite their protestations, the Republicans will be blamed.

Of course, the Treasury could prioritize the check-cutting. Social Security, military pay, veterans' benefits and Medicare and Medicaid, for instance, are life-and-death matters to a lot of people.

Passport applications, customs inspections, mining permits and that sort of thing are not that important.

Let those shiploads of Chinese-made crap sit in the harbor until somebody is available to process the paperwork to off-load them.

Oh, yeah. Those federally-funded air traffic controllers need some down time. Shut the airports down for a while.

 

[BenBurch]

People on social security disability who are not elderly.

Like my neighbor who is in a wheelchair and really very sick otherwise.

 

[BenBurch]

Uh, no. The president can't do that.

I asked a lawyer who can practice before the SC, and he says "It's untested, obviously, but likely he does have both the power to do than and the obligation."

 

[BenBurch]

High Times?

They are more in touch with reality at High Times than that place. Try again.

 

[Alferd_Packer]

. . . apparently this isn't the first time he's made this threat, . . .

What "threat?"

Stating that he couldn't gaurantee something is not the same as saying that he won't do somtething.

If there is uncertainty, then it is true, he can not guarantee it.

You also have to remeber, this is not just about the funds for thechecks, it is also about the infrastrucutre needed to process and send out those checks. If the governemnt is forced to scale back on workers, then who's going to lick the stamps?*


*figuratively speaking

 

[lomiller]

The Treasury would have to decide for itself what obligations can be delayed or broken with the least overall damage, but I think it's fairly obvious that since SS can be continued with no more total debt than it takes to get pieces of paper into mailboxes the Treasury wouldn't decide to disrupt it.

I don’t think it works that way. Hitting the debt limit forces the US government to spend no more than the revenue it takes in and SS payments still count against that no mater where you get the money from. After shutting down all government that can be closed (saving perhaps $150 billion?) and suspending military pay, cutting SS payments is probably the lowest impact way to stay within the debt limit.

Though I do wonder, if you acknowledge that you still owe this money is it not still debt?

 

[lomiller]

You know what he could do though, is to sell some of the gold at Ft. Knox.

This was discussed before and the conclusion was that this gold is on the Fed’s balance sheet and therefore not under direct control of the president.

 

[johnny karate]

What "threat?"

Stating that he couldn't gaurantee something is not the same as saying that he won't do somtething.

If there is uncertainty, then it is true, he can not guarantee it.

QFT

I love how the anti-Obama camp is taking his qualified statement about a demonstrable uncertainty and turning into THE BIG LIE.