Well, it finally happened. This week President Obama threatened that August Social Security checks might not go out unless he can get the Republicans in Congress to raise the debt ceiling. Huh? What about the Trust Fund and all that cash that’s keeping the Social Security program solvent for the next 8-12 years?
Here’s what’s happened…
Congress has taken the 15.3% payroll tax that every worker paid into the trust up until this year (the tax is only 10.2% for 2011) and used it to purchase government-issued bonds. They then took the cash and added it to the general fund and spent it. These bonds are supposed to have priority over all other government obligations.
Well, apparently these bonds are no better than any other government obligation because holding up the Social Security payments is the only thing that has been mentioned as a way to conserve cash should the government lose its ability to borrow. That means that every other claimant who gets paid from the general fund could have as good or better chance of getting his money than do the Social Security recipients. People holding public US Government bonds having a lower priority than the Social Security Trust Fund bonds will get paid. Presidential and Congressional staffs get paid. Federal Employees get paid. Federal contractors get paid. Federal transfer payment recipients get paid. People whose payments are supported by the highest priority obligation issued by the US Government? They apparently won’t get paid.
So what is it Mr. President? Is this your idea of leadership? Is this your latest scare tactic to put heat on the Republicans? Or is this a warning to everyone that the solvency of the Social Security program is like everything else and lives and dies with the current cash flow of the bankrupt US Government?
actonnation 