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10:54 AM on 07/21/2011
Great job pointing out that the SS trust fund is fully able to continue to provide the checks. The political theater is clouding that fact. SS is a separate account, that has loaned its money to the federal government, now the Republicans are screaming that paying back the trust fund is going to bankrupt us.

I am however confused by your statement "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."

The money lent to the government by SS has already been spent. If those bonds are cashed in, more money will need to be borrowed in order to pay them. This would require an increase in the Public Debt, a trade off from one line to the other. The govt still needs to borrow over the $14T in order to pay that back to the fund if i understand correctly.
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wbearl
10:44 AM on 07/21/2011
Social Security was not designed as a retirement program, it was designed as a retirement supplemental. Social Security was a program operating in the red from day one, but until LBJ took Social Securities Money and rolled it into the General Budget we could see just how economically viable Social Security was. I'm retired, but not on Social Security, don't get a nickel from Social Security. I'm retired on Railroad Retirement. Railroad Retirement is fiscally solvent for the fore seeable future. So what is the difference between RRR and SS? First off, those of us who paid into RRR paid in more than twice as much as people on SS, more than twice as much. Second RRR is based on tiers. You need a minimum of 10 years paying in to it to become qualified at the lowest rate (the lowest rate is still better than SS). The rate than increases at 10 year intervals till you hit 30 years when you qualify for the highest rate. Your pension is based on the best year of your last 5 years working. Third, RRR can and does invest it's money in what ever the trusties think will give the best return. Those Trusties are from the Unions, Companies and the Feds. SS is legally bound to invest in nothing but US Bonds.
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ignacio sanabria
Mirror synapses at work
10:43 AM on 07/21/2011
The mind of the average citizen, specially the one who relies on SSA, is cluttered these days with the wrangling over government debt, which has nothing to do with his/her concerns, but rather his/her mind is occupied on who on earth the greatest country in the world is in such predicament and why politicians have NO idea how to fix a problem they created in the first place by enacting laws that helped a minority at the expenses of the majority of Americans. This does not make any sense at all, he/she is thinking now!
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Patricia Clark Taylor
10:33 AM on 07/21/2011
Social Security is good for seniors and for the nation. Currently, every senior I know (Dems, Repubs, and T.P.) is helping children and grandchildren in some way. For every dime they get, seniors pass on a ton more in aid and love for generations that come after them. Social Security, for the good of this nation, should be protected by law...and in such a way that it is no longer a political football.
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11:39 AM on 07/21/2011
Fanned for a tremendous post. That is so true, personally I set aside a portion every month to assist the grandkids with their college education.
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12:58 PM on 07/21/2011
That's a nice story. Too bad it doesn't touch on the fact that many seniors are living for 20 + years without producing anything of economic value, while leeching off the taxpayer.
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Notsosurearewe
A pair o' pathetic peripatetics
06:59 PM on 07/21/2011
I can't reply to your previous comment as it is automatically at the end of the comments list, but here's my response: Anyone on death row is automatically put through to the appeals court system, automatically costing extra tax $$$ as well as the additional costs of capital trials and enhanced security on death row. Since most appeals take 10 ish years anyway, you have to add in the extra costs of food, clothing, etc. that the prisoner requires in any case. There are also a number of studies that have shown that the price of keeping an inmate on death row is much higher than keeping them in prison on a life sentence. I'll be happy to find you a few inf you'd like.
10:30 AM on 07/21/2011
commentary from the guardian:

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jul/21/barack-obama-social-security-cuts

What you can't read in the US.
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meoshi
A Member of We, the People
12:26 PM on 07/21/2011
You can read this and more in the US...........Go to Glenn Ford's "Black Agenda Report" and you will read a lot..........about this subject..........
10:28 AM on 07/21/2011
In 2010, after 25 years of surplusses, Social Security ran a deficit (employee/employer contributions were exceeded by benefits paid out) of about $35 billion dollars. For 2011, Social Security's deficit is estimated at $45 billion dollars with deficits scheduled for the foreseeable future.
It is true that Social Security has a credit at the Treasury for approximately $2.7 trillion and that amount is the total of all surplusses accumulated over the 25 years prior to 2010. By law, Social Security had to transfer all surplusses to the Treasury which issued special purpose bonds now totalling $2.7 trillion dollars.
In 2010, when Social Security ran a $35 billion dollar deficit, $35 billion worth of bonds were submitted to the Treasury for redemption. The Treasury then supplied $35 billion dollars to Social Security so that full benefit payments could be paid.
This transfer of funds to Social Security to cover deficits will be ($45 billion) in 2011 and for the forseeable future until the bonds held by Social Security are exhausted.

In the future the Treasury will have to pay the amounts necessary to redeem the bonds as presented and that money can only come from the government's General Fund. The only source of revenue to the General Fund is from taxes, fees and borrowed money. Therefore, instead of collecting surplusses from Social Security, the Treasury must now redeem Social Security bonds and those costs of redemption WILL add to future government budget deficits and eventually the National Debt.
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wmnorton
Moderate where moderate used to be
11:46 AM on 07/21/2011
So? Of course the only reason that SS is into the trust fund is because the Republicans trashed the economy. But of course the Republicans don't care about SS since they represent the part of the poulation that will never need it.
09:49 AM on 07/21/2011
SS and Medicare shouln't even be on the table. For 50 years Wall Street and Banks have gotten nothing but tax breaks. If I don't get my SS check this month, too bad. The bank won't get the mortgage pmt. That's OK. The banks have been deregulated so long, we have become a plutocracy. Only the wealthy control. I hate the banks and I hate Wall Street. They took our money and have done nothing for Main Street. Let 'em crash. We need smaller banks, anyway.
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johnb123
All I ask..just be reasonable....do things my way
09:48 AM on 07/21/2011
It really doesn't matter what they CAN do, it what they will do. The SEC had all the laws for shutting down Madoff, but refused to enforce any of them. It was in their political best interest not to. BOTH sides are using Social Security and Medicare as political pawns. They would stop paying them in a heart beat, if they thought it would give them a political advantage.
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gutenmorgen
a.k.a. crowsnest
09:40 AM on 07/21/2011
I have long thought that this would be the case but thank you, writers, for explaining it so clearly. Now you need you to go to the White House, ring the bell on the front door, and ask the butler to see and speak to our President who either lied or is misinformed, both very bad habits of his Highness.
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rosiebond007
09:35 AM on 07/21/2011
Any cuts in the social programs should be matched by an equivalent revenue increase.

DON'T BACK DOWN AND CAVE TO THESE SELFISH REPUBLICANS
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09:32 AM on 07/21/2011
SS supports the rest of the government by LOANING it's $2.7 TRILLION SURPLUS to the Federal Government. It's akin to borrowing from China or any other source.

You can even say SS is supporting the Petagon as we speak.

DON'T MESS WITHH SS.

Control overall heath care costs if you want to to control Medicare costs.

Seriously consider a single payer healh care system, cover everybody, have better outcomes, eliminate the insurance bureaucracy, eliminate bankrupties realted to medical costs AND

SAVE A TRILLION DOLLARS EVERY YEAR !
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09:12 AM on 07/21/2011
Thank you, Ms. Altman, for this much-needed clarification.
09:10 AM on 07/21/2011
Social Security checks will go out on time because taxes are still being collected for Social Security. The only way the check will not be sent to Social Security recipients will be if President Obama stops them. Without a debt ceiling, he will not have the money for all his social programs; he will have to make a decision on gets paid - Social Security Recipients or so called poor.
S M V
Give me your tired, your poor, Your huddled masses
09:08 AM on 07/21/2011
I am sorry to burst the happy bubble that this article is trying to create but it is just flat out wrong. I will try to make it simple.

The government has “X” amount of debt and needs more to continue to pay its bills. The fact that some of the I.O.U.s are stored in an account marked Social Security is irrelevant. For the government to redeem this debt and pay SS checks it needs to take in more income, sell additional debt or prioritize SS above other debt.

- It can’t sell more debt until the ceiling is raised.
- Even if taxes are raised it will not take effect until next year.
- They will need to pay off those that voluntarily loaned them money first, so that they come back and buy more later.

So there is a real possibility that SS checks will not be paid unless the debt ceiling is increased and this is a good thing. It is forcing the politicians to look seriously at our spending for the first time in decades.
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gutenmorgen
a.k.a. crowsnest
09:41 AM on 07/21/2011
It all depends on what is in the fine print.
08:18 AM on 08/01/2011
The principal owed on the bonds in the social security trust funds already is counted in the debt that is subject to the debt ceiling. I can send you the reference to the United States Code provision that says that, if you want it. That means that every dollar of principal that is paid on redemption of a bond reduces the debt that is subject to the ceiling. That allows the govt to borrow another dollar without violating the ceiling.
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08:55 AM on 07/21/2011
When you want a Democratic President to fail what is the conservatives line of attack every social programs that the Liberals put in place to help the American people, so even though SS and Medicare has no place in the American Debt limit talks they grabbed on a chance to score the golden ring! The problem is it will cause a change in the political edge the Republicans thought they had........