The President who cut $500 billion from Medicare with ObamaCare is now threatening not to send social security checks if the budget ceiling is not raised.
But, Mr. President let’s not forget the Social Security Trust Fund. Redemption of bonds in that trust fund does not affect the debt ceiling.
Social Security comes from a 12.4% payroll tax, capped at $106,888, split between employees and employers. From 1984 to 2009 Social Security revenues exceeded payments to beneficiaries. Congress naturally spent these surpluses. They aren’t going to leave any surpluses lying around. But, they issued special bonds which can be redeemed when the fund has a deficit.
By law, the Treasury must redeem any bonds presented to it by the Social Security Administration. When the Treasury does redeem these bonds to fund payments to social security, total government debt ,subject to the debt limit, falls by the amount of the redemption.
So very simply, Social Security must be paid and paying it does not affect the debt limit until all of the $2.4 trillion Trust Fund is exhausted.
When your President says there may not be enough in the coffers to issue Social Security checks if the debt ceiling is not raised he is either ignorant or lying. Neither is a good thing for a president. I won’t choose, you choose.
