Social Security Benefits ‘At Risk’ In Debt Fight

[Purveyor]

Source: ABC News

WASHINGTON — Social Security benefits for millions of Americans could be put on hold in as few as 10 days if the nation’s debt limit is not increased, the Obama administration said today.

In response to a flood of questions from concerned beneficiaries, the Social Security Administration, in consultation with the Treasury Department, has begun advising people that it cannot guarantee payments after Oct. 17 unless and until Congress acts.

“Unlike a federal shutdown which has no impact on the payment of Social Security benefits, failure to raise the debt ceiling puts Social Security benefits at risk,” a Social Security spokesman told ABC News.

Neither the Social Security Administration nor Treasury Department would elaborate on specifics of how and when payments could be reduced or cut off. Those contingency plans are still being worked out, a Social Security official said.

Read more: http://abcnews.go.com/blogs/politics/2013/10/social-security-benefits-at-risk-in-debt-fight/

---

The f'n lid will blow right off DC should this EVER materialize...

[sakabatou]

1. I'm fucked (and many, many others) if the benefits stop

[ruffburr]

8. Thats the understatement of the YEAR!!!!

So many rely on these checks month to month (including me) it is generally between 600 - 2500 depending on ones situation to say for most it is their only lifeline is also understated, I know "let them eat cake" Well, Please remember Mr. Boner and Friends how louie and his antoinette ended up as your fate seems parallel

[RebelOne]

13. I am screwed also.

Fortunately, my next check comes in on the 16th. So after that, I am bracing myself to see if the November check will come.

[Buddha_of_Wisdom]

33. This month's check came in... but I'm most worried about my wife's which is due on the 28th...

[geek tragedy]

2. They would be guaranteed to stop as of October 31st.

Nothing would get paid in November, not Social Security, not Medicare, not the troops, not the bondholders.

[shanti]

3. The pitchforks will come out if SS is messed with

Too many people depend upon them.

[antiquie]

4. This does not compute:

Social Security loans money to the federal government, not the other way around, right?
I mean, it is math, isn't it?

[MannyGoldstein]

5. Yeah, but...

IIRC, unlike other loans to the Feds, payback is guaranteed but when it will be paid back is not. That's up to the Feds to decide.

[antiquie]

6. Foul words just want to come off my fingers. ~ nt

[MiniMe]

19. The Social Security Trust is invested in TBills

If the government can't borrow any more money, they can't pay back the TBills. Social Security if the largest holder of the debt because of the TBills

[Samantha]

23. I heard Geithner speaking about this once

He said when the Government withdraws a sum from the Social Security Trust Fund, it must sell a like amount of T-bills. In this economy, that is difficult to do.

I am just reporting what I heard him say, not defending it.

Sam

[Yo_Mama]

27. But the debt limit doesn't apply!

It is not that the government can't issue any more T-Bills or notes or bonds, it is that the government can't increase total debt.

And since SS is "invested" in special-obligation Treasury instruments that are already included in the debt limit, redeeming those SS funds does not raise total debt at all.

The government is selling Treasuries right now with no problem, and the Fed stands by to buy them all if they have to do so. There is literally no reason why SS benefits would not be paid.

[suston96]

7. Outright misleading lies about Social Security and the National Debt

The purpose of this essay is to explain a complicated and important issue in practical terms. For those who are interested in the technicalities, the footnotes contain detailed documentation to complement and substantiate the main text. All financial data is based on figures produced by the U.S. government. Since these figures are constantly changing, for the purpose of uniformity, the year 2000 is used as a baseline.



The Impact of Social Security on the National Debt


By James D. Agresti

September 1, 2001



As of December 2000, more than a trillion dollars of the U.S. national debt is owed to the Social Security program.[1][2] This amounts to $3,600 for every man, woman, and child living in the United States.[3] By 2015, this figure is projected to reach $9,000 per person, burdening young people with a debt that they had no part in creating.[4][5] To make matters worse, some politicians are pushing a proposal to "save Social Security" that would increase this figure dramatically.



This essay will explain and substantiate the following points:

Citizens are being misled about the national debt.

Despite what you've been told, the budget has not been balanced for the past 3 years.

Every dollar in the Social Security Trust Fund is matched by a corresponding dollar of national debt.

What is referred to as "raiding the Social Security Trust Fund" has no effect on the Social Security Trust Fund. Its real effect is to raise the national debt.

What is referred to as "putting Social Security into a lockbox" has no effect on Social Security.

Some politicians are promoting a plan to "save Social Security" that could add 9 trillion dollars to the national debt.

Privatization would block politicians from using Social Security as a smokescreen to run up debt behind the backs of citizens.

Citizens are being misled about the national debt

Read the rest: http://www.justfacts.com/news.impactSS.asp

[antiquie]

20. I do not believe privatization to be a solution nor an option I would consider.

[Samantha]

24. Privatization of Social Security would also incur huge transition fees

In 2003, the estimate for that was 3 trillion dollars. I cannot begin to imagine would that figure would be today. The Government would not pay the transition costs, the recipient of the funds would not either; the way it would be paid would be to cut the benefits of recipients.

Additionally, when the economy crashed, I asked publicly (here) how much of the Trust Fund would have been lost had it been invested privately. Paul Begala answered that on a cable television show - he said 40 percent.

Social Security is not an investment vehicle -- it is an insurance policy against poverty. That type of reserve should be handled by any risk-taking entity.

Sam

[Yo_Mama]

28. This is absolutely correct

If the entire SS Trust fund were redeemed tomorrow, the 2,6 Trillion of new Treasuries sold on the market to do so would not change the Federal debt subject to the debt limit AT ALL.

[Sirveri]

34. But wouldn't the gov't have to sell T-bills first to pay back the other T-bills?

If they can't sell any T-bills to get the money to buy back the T-bills that Social Security would cash in, then how can they pay them? Unless Social Security has the ability to simply sell off their own T-Bills?

[Yo_Mama]

35. SS does not, but they don't exist really on the market

What happens is that first the SS trustees (or DI, or HI) go to Treasury and hand them what in effect are IOUs. Then, and only then, does Treasury go raise the money. So not even in a nominal sense does the transaction ever violate the debt limit.

Because so much of the Treasuries out on the market are short term, the Treasury is constantly rolling issues. Even when the debt limit is reached, the Treasury continues to sell bills, notes and bonds to replace all the ones constantly expiring, and no one thinks that violates the debt limit.

[Nye Bevan]

9. One possibility is that benefits will be paid not in money but in IOUs.

And the IOUs would probably be tradeable (meaning that banks would redeem them for real money at close to face value).

[Faryn Balyncd]

10. This is THEFT of the SS Trust Fund

[Samantha]

25. The Government also borrows against Federal employees' pension funds

There is a law which enables it to do this. Right after 9/11, they announced the Government would borrow funds from the employees' pension funds to keep the economy stable. I believe they also did this in 2008 when we encountered the financial meltdown.

I have often wondered the Government borrowed against the huge reserves the United States Post Office has been forced to accumulate. I believe the answer is "of course" but I have no proof. When the talk started about doing away with the post office, I immediately thought that would relieve the United States Government of a huge amount of debt.

Sam

[Yo_Mama]

29. There is no legal justification for not paying SS benefits, that's for sure

And I think they will - they are just trying to scare people who depend on their monthly benefits.

[Owl]

11. I'm also concerned of any pending consessions....

[L0oniX]

12. Warning: Fuck with my SS and I WILL &*$^#@ with you!

[840high]

14. You won't be alone. Think

people would riot.

[geomon666]

15. Yeah this won't cause riots or anything

These fucking people are playing with fire man. And no, this isn't a threat or anything like that. I just know that you take what little people have left and it's like lighting a match on a stick of dynamite. You see it all over the world and the US is no exception.

[graywarrior]

16. Oh, there will be blood

[on point]

17. Not failure to pay benefits. Failure to back loan to organization that pays benefits

[wordpix]

18. who's got a death panel for granny now? The repuglicons, that's who

Messing with Granny's SS, great way to go. Do you know how many elderly are in care facilities, who must pay with their SS checks? Not to mention independent elderly who no longer work. This is just disgusting that the repukes would even think this is acceptable. The Grand Oligarchy Party is hard at work tearing down the entire fabric of society.

[on point]

21. B.S. I say stop paying that other debt back, you know T-Bills. Stop paying those first.

[blkmusclmachine]

22. The GOPee: America's #1 Terror Organization

And the DC DEMS treat them as equals...

[Paper Roses]

26. It just gets worse. I'm sunk if the cut SS and Medicare.

What does the government think we are supposed to do?

Novel idea Washington, just end the wars and keep the money where it belongs.
Here!

(I know, fat change of that.)

[DustyJoe]

30. what a relief

Wow, now I can look forward to not having FICA withheld from my pay and my employer will have extra money since they won't have to pay the employer match. Right ? This threat, sword over the head is trotted out by every administration in times of Government budgetary crisis or debt crisis. We won't pay entitlements, SS, disability, Medicare etc. So the typical 'let us scare Grandma and Gramps' meme is trotted out yet again by another administration of 6 figure guaranteed salary for life overpaid pols who NEVER have to worry about getting a SS check. I am not surprised that it has, but I am surprised at this administration for doing it repeatedly. Just like July 2011 all over again. Tiring and overplayed.

[DustyJoe]

32. Deja Vu

Forgot the 2011 link, my bad ....
.
http://money.cnn.com/2011/07/12/news/economy/debt_ceiling_social_security/index.htm

[Fearless]

31. Social Security is ALREADY PAID FOR

It neither adds nor subtracts from the federal debt or deficit. So where exactly will this money be going that they couldn't pay it out?

[bvar22]

36. Here. Let this Liberal explain it:

#t=26


ANYONE who suggest cutting Social Security to ease The Deficit,
or even mentions cuts to Social Security in a Budget "Negotiation"
is being purposefully misleading (IOW, they are Lying)!

What is worse is that they KNOW it.