Posted on 10/08/2013 6:49:13 AM PDT by SkyPilot
The Social Security Administration has begun warning the public it cannot guarantee full benefit payments if the debt ceiling isn’t increased.
When asked by the public, the agency is notifying beneficiaries that “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,” according to a person familiar with the agency directive.
The warning was assembled after the agency consulted with the Treasury Department, which would play a lead role in determining how the government handles payments if the borrowing limit isn’t raised soon.
“Our employees started receiving questions from the public, so the agency worked with Treasury to provide an answer they could use when asked about the debt ceiling by the public,” a Social Security Administration spokesman...
(Excerpt) Read more at blogs.wsj.com ...
They are going to print and mail out 50 million letters saying they are running out of money.
lolz
They use that scare each and every time....they know seniors will quiver at even a hint of them cutting SS......it’s always one of their last resorts.
But it does indicate they are running out ways to stem the tide against Obamacare and the Debt.
There are different kinds of SS checks mailed out, not all are to old people or people who paid anything in.
Treasury ‘borrowed’ the money from tax revenues, to fund the borrowing from a private banking company/cartel known euphemistically as ‘The Federal Reserve’.
Those lamp posts are reserved for those who try to take those benefits away.
So I agree with the comments that this is all sound and fury, signifying nothing.
It is the typical lies, deception, and demagoguery from little barry bastard boy-king, the petulant bullying narcissistic shiftless thug. In America, democrips worship those who are too stupid to know how to lead so they just lie all the time. Little bastard barry is their little man-god.
“The adminstration can redeem bonds in the Social Security “Trust Fund” so the Federal government can borrow more money to pay Social Security checks without increasing the debt ceiling, but there is no law that says they have to.”
Obama will default on the federal debt, and or Social Security, BEFORE he will “default” on the agencies responsible for Obamacare for what they need for Obamacare.
Obama puts his political “legacy” before the people, before the nation, before everyone; somehing even Slick Willy would not do.
Obama can pay the interest on federal debt, AND pay Social Security benefits. He simply needs to make cuts elsewhere, and it is those cuts elsewhere he thinks he can refuse to make and cut Social Security or default and get away with it. I say let him try.
The math is there. The rest of the cuts are possible without jeaprodizing Social Security or the “full faith and credit of the United States” and still maintaining all that the federal government essentially needs to maintain.
But the petulant-in-chief thinks he comes first.
The fact that you can say with a straight face that taxes need to be raised to ‘save’ social security indicates you have no grasp of mathematics.
When the government collects the extra taxes, they will be immediately spent and the National Debt increased by that amount. All that does is reduce the perceived need to cut spending and create an even more enormous problem, albeit a few more years down the road. The problem gets bigger exponentially because the obligation to pay benefits grows with inflation, and there is no offsetting growth in assets to cover these costs. Then on top of that you add the 1% or so the bonds earn which is actually another increase in debt.
Social Security will collapse under every ‘fix’ except for privatization. Mathematical fact.
According to me, ABC is full of crap.
The Death Panels can be big plus for SocSec and Medicare.
Cutting even a year off the life expectancy is huge for the financials.
When the grandkids get snippy about grandma getting off’d, the regime will offer up some student loan relief chits.
You can raise the payroll tax to such a level as to make SS solvent. It is pure mathematics. From the 2013 Social Security and Medicare Boards of Trustees Annual Reports
" Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012. The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Redemption of trust fund asset reserves by the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits. Since the cash-flow deficit will be less than interest earnings through 2020, reserves of the combined trust funds measured in current dollars will continue to grow, but not by enough to prevent the ratio of reserves to one year’s projected cost (the combined trust fund ratio) from declining. (This ratio peaked in 2008, declined through 2012, and is expected to decline steadily in future years.) After 2020, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of total trust fund reserves in 2033, the same year projected in last year’s Trustees Report. Thereafter, tax income would be sufficient to pay about three-quarters of scheduled benefits through 2087.
You can increase the payroll tax to make up the 25% shortfall. That is just a fact.
When the government collects the extra taxes, they will be immediately spent and the National Debt increased by that amount.
SS is a pay as you go program, i.e., today's workers pay the benefits for today's retirees. The payroll taxes collected go directly to the SSA, which uses them to pay benefits. If the amount collected is equal to the benefits paid, there is no increase in the national debt.
The government (read General Fund) has been using the SS "surplus" to borrow against for other purposes and provides interest bearing, non-market T-bills in return. The increase in the national debt has nothing to do with SS taxes.
Social Security will collapse under every ‘fix’ except for privatization. Mathematical fact.
Wrong. The 12.4% payroll tax (3.2% each for employee and employer) can be raised to cover the SS shortfall. I am not recommending that due to the harm it would cause the economy, but there is no doubt that mathematically, you can increase revenue to make SS sustainable. You could also reduce benefits to achieve the same effect.
Related:
VA: Veterans’ Benefits Will Be Suspended in Prolonged Shutdown
http://www.freerepublic.com/focus/f-news/3076477/posts
If they don’t send out the monthly checks, the people will stop sending the feds quarterly payments. Then the democrats truly won’t have any money to spend. I don’t see this happening.
Sorry, there was nothing ‘paid into’ nor ‘contributed’. There is, was and never will be a ‘set aside’ nor ‘lockbox’.
You, me and the rest were TAXED, plain and simple. Just because you bought into the gov’t lies to cover their Unconstitutional Ponzi scheme means nothing.
No offense, but your group think is a reason the Conservatives will NEVER shrink gov’t back to A1S8. It’s always ‘hands off’ of the ‘ethical’ (IE: *I PAID for it*) mine, mine MINE regardless of the fiscal slavery of our future/posterity.
Instead, the same Congress has been re-re-re-elected. I sure do hope that Gen Y (maybe even us X’s) rise up to finally kill what never should have been. It’d be about time SOMEONE did so.
Have you ever thought about running for office? You sound like a politician
By law, (quaint notion that laws actually are followed) the SS funds received in excess of what is needed to pay current recipients, can only be used to invest in these bonds. These bonds become part of the national debt.
Back when Reagan was in office the percentage amount paid in was raised. This additional amount was to be invested so that there would be sufficient funds in the system to pay for the baby boomer's retirement.
Hence the baby boomers became the first generation to pay in for their parent's generation as well as for themselves. IIRC, SS was an “off budget item”, but when Clinton and Gingrich worked out their compromise, it was put “on budget” so that it would make the deficit appear smaller.
The bonds were not actually cashed, they were still in their special account on the books. Whenever SS receipts are less than what is required, the Treasury redeems the bonds and this reduces the national debt.
That's why the threat to withhold the SS payments is so bogus. Right now there are sufficient bonds for the government to pay social security with out raising the debt ceiling.
Down the road when the so called trust fund (special bonds) runs out, everyone will get an approximate 25% reduction in the amount of their social security check, unless something changes. Maybe more, if the jobs don't come back to provide current payments into the system.
Most countries have already switched from this “Bismark” system to a “private” system. So it's a sad state of affairs. Even sadder when you realize that the government has already effectively given everyone a reduced amount of their check through the mechanism known as QE.
This decreases the purchasing power as surely as an outright cut in the dollar amount would do. Yet many people don't understand it well enough to know it.
So all the while that the politicians are pretending to stand up for Seniors, and saving Social Security, they are just being first rate con artists all the while letting monetary policy steal the buying power.
They are also making the stock market appear to be doing great, implying that business is great. Not true. The purchasing power of the dollar is going down. Hence the price to buy shares of stock is inflated to reflect the inflation.
It's a mess to be sure. I am not sure that even if Washington sincerely tried to solve this mess, it could even be done. There's a tipping point-a point of no return for a country who follows loose fiscal policy and inflationary monetary policy. We are more than likely past that point.
Pay off all the debt you can, and invest in non-monetary assets, I suspect things could get worse before they get better.
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