Obama compromise requires general fund to write SS fund a $120B check

[Still a Democrat]

The bill says that the general fund will write a check to the Social Security trust fund for $120 billion (the amount it loses from the payroll tax holiday).

So in the end, the SS fund isn't touched at all.

[Kber]

1. Please don't confuse us with facts.

They are getting in the way of the narative here.

TIA

[Roland99]

2. So all it does is postpone the payment of taxes from monthly/quarterly to the following April 15th?

[Better Believe It]

3. Using "general funds" to finance Social Security opens the door to its destruction by Republicans

Have you read the posts that explain why and how Republicans plan to do this?

Here:

The avowed ENEMIES of Social Security have been trying to peddle a "payroll tax holiday" for YEARS:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9741672&mesg_id=9741672

Here:

Republican Senators Spill The Beans! Obama's Deal on Payroll Tax Cut Threatens Social Security!
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9729673&mesg_id=9729673

And here:

Dean Baker: The Obama administration cannot be counted on to defend Social Security
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x9742619

[Recursion]

8. That horse left decades ago, going the other direction

when we put FICA levies into the general fund in return for treasury bonds.

[jtown1123]

18. Thank You! This answers this better than I could.

[bullwinkle428]

4. There was always supposed to be a firewall between the trust fund and the general fund!

This completely opens the door for the Pukes to starting hacking away at it with a meat-axe, and insist on providing their own "alternative" solution... :puke:

[notesdev]

5. So they just lump it on the national debt

Let's call it what it is - a massive transfer of wealth from the young to the old. Many of the people who are going to be held responsible to pay that down haven't even been born yet, so they don't count, right?

[Recursion]

9. The trust fund is already the national debt

Or, rather, it's about 1/7th of the national debt. That's why SS can add to the deficit but not to the debt; borrowing money to redeem bonds is deficit-heavy but debt-neutral (for the most part).

[Nite Owl]

6. And who is going to pay for this?

the very people who think that they are getting the tax break. There is no free lunch. SS should not be involved and that is why the GOP wanted this!

[Recursion]

10. The same people who are going to have to pay anyways when the boomers retire

Some combination of income tax payers (if trust fund bonds are redeemed from general revenues), bond investors (if they are replaced by general treasury bonds), and everyone (if the trust fund is quantitatively eased).

[wiggs]

7. When? By what congress? How inviolate is that or is it changeable if congress

later rescinds? Will this be framed as a bailout of social security (of course it will)? Why not transfer treasury bills first to offset the subsequent revenue cut?

Not much of a lockbox.

[ljm2002]

11. That is precisely why this is the WORST part of the proposal...

...for the first time ever, it ties Social Security funding to the general fund rather than maintaining it as a self-funding program. This, in turn, allows Republicans and other enemies of Social Security to argue that SS does too contribute to the deficit, and also that its funding is insufficient (as illustrated by the "need" to give it $$ from the general fund -- a nice, neat, circular argument).

Also, when the payroll tax holiday expires in one year, Republicans will oppose letting it expire, arguing that it is a tax hike.

This is a Republican wet dream.

Thanks President Obama, thanks a bunch. This is an atrocity.

[Still a Democrat]

12. What?

This doesn't tie SS funding to the general any more than it has been. The general owes trillions to SS, this is 120B more.

[ljm2002]

13. Ridiculous.

The reason the general fund owes SS is that the general fund borrowed SS funds. The SS is SELF FUNDING. The so-called payroll tax holiday will change that, and next year the Republicans will claim that letting the holiday expire is raising everyone's taxes expire.

This provision is the first step in erasing the line between SS funds and general funds. In my opinion they want to do this because they really don't want to pay back everything to SS. This will open the door to cuts in the plan. They will be able to argue that SS is not self-funding.

This tactic is supported by the likes of Grover Norquist, and it stinks to high heaven.

I hate other provisions in this atrocious bill -- but for my money, if they can only kill one provision, this is the one that needs killing.

[Better Believe It]

14. This will be the first time ever that money is taken out of the general fund to finance S.S.

[Individualist]

15. Correct.

:mad:

[Name removed]

16. Deleted message

Message removed by moderator. Click here to review the message board rules.

[jeanpalmer]

17. Good luck on cashing that one

I'd immediately go to the bank and cash it. The debtor's overall debt is 6x his income and increasing rapidly, he annually spends all his income + an additional 70%, and he just gave away another $900 billion that he doesn't have. He's a profligate spender who refuses to live within his means, and for some reason people are lining up to lend him more money. He has no intention of paying off his debt, he uses money from new investors to pay off old ones. My guess is if you try to cash the check, he won't give you cash, he'll give you another IOU instead.