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AP: Debt Limit Endangers Social Security Checks

From a white knuckled Associated Press:

Hitting the debt limit: What bills would be paid?

By JIM KUHNHENN | January 14, 2013

WASHINGTON (AP) — In the summer of 2011, when a debt crisis like the current one loomed, President Barack Obama warned Republicans that older Americans might not get their Social Security checks unless there was a deal to raise the nation’s borrowing limit.

After weeks of brinkmanship, Republicans consented and Obama agreed to a deficit-reduction plan the GOP wanted. Crisis averted, for a time.

Now that there’s a fresh showdown, the possibility of Social Security cuts —and more — is back on the table.

So this has worked in the past. Which means it’s time for the AP and the rest of the mainstream media to fear monger about this phony threat to help Obama get his way again.

The news media never get tired of ‘crying wolf,’ as long as it helps them advance their sacred cause of more and more government spending.

The government could run out of cash to pay all its bills in full as early as Feb. 15, according to one authoritative estimate, and congressional Republicans want significant spending cuts in exchange for raising the borrowing limit. Obama, forced to negotiate an increase in 2011, has pledged not to negotiate again.

Without an agreement, every option facing his administration would be unprecedented.

It would require a degree of financial creativity that could test the law, perhaps even the Constitution.

It could shortchange Social Security recipients and other people, including veterans and the poor, who rely on government programs.

By the way, this is the only time the news media is concerned about veterans. When they can use them to push for more (non-military) spending. They never mention veterans when they are pushing for cuts to the Pentagon’s budget.

It could force the Treasury to contemplate selling government assets, a step considered but rejected in 2011. In short, the Treasury would have to create its own form of triage, creating a priority list of its most crucial obligations, from interest payments to debtors to benefits to vulnerable Americans

Given how many times we have going through this dance, you would think the Treasury would have this all worked out by now.

In such a debt crisis, the president would have to decide what laws he wants to break. Does he breach the borrowing limit without a congressional OK? Does he ignore spending commitments required by law?

What the hell is the AP talking about?

In a letter to Obama on Friday, Senate Democratic leaders urged him to consider taking any "lawful steps that ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary."

Harry Reid and the rest of the Senate Democrats are always trying to give away Congress’s powers. At least whenever there is a Democrat in the White House.

(And never mind that Reid and most other Congressional Democrats voted against raising the debt limit under Bush, when they thought it could force him to lose the war in Iraq.)

The White House has resisted that path. It has rejected recommendations that it invoke a provision in the 14th Amendment to the Constitution that states that "the validity of the public debt of the United States … shall not be questioned." …

Because even the White House has to admit that this is a completely asinine argument. The passage in question was a reference to paying off our Civil War debt. Which some in the South might have had second thoughts about doing.

So what’s left if Congress does not act in time? … The Treasury can stop payments to a special fund that purchases or sells foreign currencies to stabilize world financial markets…

There are other extreme possibilities as well. The federal government could sell some of its assets, from its gold stockpile to its student loan portfolio…

An idea pushed by some liberals would take advantage of a legal loophole meant for coin collectors and have the Treasury mint platinum coins that could be deposited at the Federal Reserve and used to pay the nation’s bills. But the Treasury issued a statement Saturday putting the idea to rest, saying neither the department nor the Federal Reserve believes the law "can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit." …

It’s probably the most crackpot idea ever floated. No wonder Paul Krugman latched on to it.

Once all efforts are exhausted, then the government would be in uncharted territory.

At that point, the government would continue to get tax revenue, but hardly enough to keep up with the bills. According to the Bipartisan Policy Center, the federal government between Feb. 15 and March 15 will get $277 billion in revenue and face $452 billion in obligations.

The Treasury would have to decide whether to pay some obligations and not others or to simply pay for one day’s bills as it tax revenue rolls in, exponentially delaying payments the longer the debt ceiling is not raised. Under virtually every scenario contemplated, payment of interest on the debt takes precedence to put off a calamitous default.

That’s the problem when you borrow money. Especially when you borrow more than 40% of what you spend.

"I happen to think the triage would be chosen to create the maximum amount of political pressure to break the impasse right away, which would be withholding Social Security checks," said Philip Wallach, a fellow at the Brookings Institution.

Which is exactly why Obama always threatens to withhold Social Security checks. And why his minions in the news media always fan the fear.

But notice that there is no suggestion anywhere in this article that we could cut spending to a level that actually matches our tax revenue. Such an idea would never even occur to AP ‘reporters.’

This article was posted by Steve on Monday, January 14th, 2013. Comments are currently closed.

4 Responses to “AP: Debt Limit Endangers Social Security Checks”

  1. mr_bill says:

    “Without an agreement, every option facing his administration would be unprecedented.”

    Yes, it might have to……gasp…..balance the budget!!

  2. Tater Salad says:

    America’s Food Stamp President. While the Rev. Al Sharpton wants to have Barack Obama enshrined on Mount Rushmore, there are 48 million Americans, mostly white on Food Stamps.

    1). America’s Food Stamp President: http://www.youtube.com/watch?v=goF23ffnxFA

    2). Al Sharpton and Mount Rushmore: http://weaselzippers.us/2013/01/12/al-sharpton-pretty-sure-obama-is-ready-for-mt-rushmore/

    3). 35% are White
    22% are African American
    10% are Hispanic
    2% are Asian
    4% are Native American
    19% are Unknown

    Almost half of all participants are children (under 18). A great many are US Military families.

    3). The President sign s executive order for a pay raises for Congress. http://www.policymic.com/articles/21661/obama-gives-congress-an-undeserved-pay-raise

    4). The military and their families are now using food stamps for than ever, yet, Barack Obama gives pay raises to Congress:

  3. Astravogel says:

    They could raise some money by selling off all of
    that ammunition that Homeland Security bought!

  4. Mithrandir says:

    When are the extremely dull-witted population going to catch on to this?

    Don’t want to pay taxes? The police will have no choice but to cut services (wink-wink) you are unarmed, and the criminals will run wild.

    Unload the prison population because of lack of funding.

    Shut down parks and enjoyable services.

    Cut veteran’s services.

    Cut health care (which will be the next threat once we are all dependent upon it)

    Cut SSI.

    NEVER cut the government, OR foreign aid, or U.N. funding, or NASA, or any of the other things, whose members are no where near poverty.

    Simon and Garfunkel need to update their song, “How many times must a man cut bennies, before you realize he’s not a man? The answer my friend, is a blowhard in the wind….”

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