Government Shutdown, Social Security

Filed in Politics, Tax, Savings by on July 18, 2011

There is no legal or practical reason to delay Social Security checks or other essential payments due to the debt ceiling or a government shutdown.

Social Security checks went out despite the 1985 and 1996 debt ceiling – government shutdown. Since 1996, the Social Security Act lets Social Security payments continue when we reach the debt ceiling. The government can redeem Social Security trust fund bonds (money the general fund owes Social Security) by issuing debt to the public. Both types of Social Security bonds are under the legal debt limit, so substituting them incurs no new debt, even in the event of a government shutdown.

Senate Republicans voted for the Toomey-Vitter amendment. It guarantees that Social Security debt payments will be a priority over other government outlays if we reach the debt ceiling and a government shutdown. Democrats killed it to keep a doomsday scenario on the table. The House should soon vote on comprehensive legislation to guarantee essential program priorities in a partial federal government shutdown.

The president and Treasury Secretary have the authority to prioritize payments, so Social Security checks and payments to bondholders go out on schedule even during of a government shutdown. Federal government income is now more than $200 billion a month. Essential government services, including Social Security, Medicare, bondholder payments and payments to military personnel, are far less than that. The Miami Herald (not a conservative paper) had very good recent story on those the government would pay, during a government shutdown, according to several accepted public plans. There is no question that these payments would include Social Security.

To the extent Obama threatens not to send Social Security checks, it is critical to realize that he is using seniors as pawns. He is trying to avoid Washington’s spending problem and slam us with tax hikes that will increase economic challenges. Americans are sick of cynical scare tactics covering Washington tax-borrow-and-spend as usual. The U.S. Debt Clock shows that we already owe:

  • U.S. National Debt – more than $14 trillion.
  • State Debt and Local Debt – almost $3 trillion.
  • U.S. Unfunded Liabilities (Social Security, Medicare) – $114 trillion.

That totals more than $131 trillion. Our U.S. Population is less than 312 million, so YOU and each man, woman and child owe almost $420,000! Before letting government accumulate more debt, for our children and grandchildren, Congress must seriously get us on a path to a sound fiscal future.

 

 

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