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Mon Jan 14, 2013, 10:21 PM

Obama: Debt limit fight imperils elderly's checks

Source: AP-Excite


WASHINGTON (AP) - Declaring "we are not a deadbeat nation," President Obama warned on Monday that Social Security checks and veterans' benefits will be delayed if congressional Republicans fail to increase the government's borrowing authority in a looming showdown over the nation's debt and spending.

Obama said he was willing to negotiate deficit reduction with GOP leaders but insisted that those talks be separate from decisions to raise the $16.4 trillion debt ceiling and avert a possible first-ever national default.

"They will not collect a ransom in exchange for not crashing the American economy," Obama said in a news conference one week before he is sworn in for a second term. "What I will not do is to have that negotiation with a gun at the head of the American people."

Bitter brinkmanship between the White House and congressional Republicans over spending has become a defining event over the past four years, testing both Obama's leverage and his resolve at different moments of his presidency. House Speaker John Boehner brushed off Obama's insistence on separating the debt ceiling from negotiations over spending cuts.

FULL story at link.

Read more: http://apnews.excite.com/article/20130114/DA3Q8O580.html

6 replies, 1592 views

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Reply Obama: Debt limit fight imperils elderly's checks (Original post)
Omaha Steve Jan 2013 OP
DJ13 Jan 2013 #1
IthinkThereforeIAM Jan 2013 #2
PoliticAverse Jan 2013 #3
kestrel91316 Jan 2013 #4
Amonester Jan 2013 #5
Faux pas Jan 2013 #6

Response to Omaha Steve (Original post)

Mon Jan 14, 2013, 10:31 PM

1. Disentangling Social Security From the Debt Ceiling


Social Security appears to be a key bargaining chip in the struggle over the debt limit. President Obama may have played smart politics when he threatened that, if the debt limit is not raised, Social Security checks might not go out on time. But he was needlessly scaring the program's fifty-five million beneficiaries, the vast majority of whom are highly dependent on each month's Social Security check. So was Speaker John Boehner who, in a recent interview, also spoke of the possible interruption of benefits.

The truth is that checks can go out, in their full amount, without adding a penny to the federal government's total debt. They can be paid without subtracting more than a tiny fraction of a percent -- if anything -- from the funds currently being used for other government purposes -- a reduction so small that it could be considered a rounding error.

Three key facts make this true. First, Social Security has its own dedicated income stream for payment of benefits and associated administrative costs. Second, in addition to its current income, Social Security has an accumulated reserve of $2.7 trillion in its trust funds. That reserve is invested, as Congress has always required, in what has been the safest investment on Earth -- treasury bonds backed by the full faith and credit of the United States. And third, the $2.7 trillion in treasury bonds held in the trust funds is included in the $14.3 trillion total debt that has reached the statutory limit.

If the debt limit is not raised, Social Security's Board of Trustees could and should exercise its right to redeem (cash in) as many of Social Security's bonds as needed to pay benefits. Every dollar of principal (though not accrued interest) that the federal government would be required to pay to redeem the bonds would reduce the total debt subject to the $14.3 trillion limit. That would make room under the debt ceiling and allow the government to borrow an additional dollar from the public to replace every dollar of principal paid by the government.


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Response to DJ13 (Reply #1)

Mon Jan 14, 2013, 10:45 PM

2. Interesting...


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Response to Omaha Steve (Original post)

Mon Jan 14, 2013, 11:06 PM

4. I love the way he's setting this up. Repuke obstructionists


will get 100% of Grandma's wrath when her Social Security check doesn't come and she gets evicted from her apartment.

This is gonna make my day. The fallout could be the straw that breaks the Republican party's back.

Not that I will be happy with grandma's situation, but I have no control over that.

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Response to kestrel91316 (Reply #4)

Mon Jan 14, 2013, 11:14 PM

5. The tearorists will fold and then, blame the President and the Democrats for not cutting spending

just like they always do (after they have damaged the economy once more).

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Response to Omaha Steve (Original post)

Tue Jan 15, 2013, 11:25 AM

6. What he and a big bunch of other folks don't get

is that the other side DOESN'T CARE about anyone or anything that doesn't have to do with them.

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