Fearmongering from the White House brings about the return of OUTLAW
Given Speaker Boehner’s (wrongheaded, ignorant, and quasi-strategical) surrender to the progressive narrative about a potential “default” in the event of a failure by Congress to vote for a debt ceiling increase (as a side note, the Dems voted in the minority against a 2006 raise, 52-48, content that the GOP “compassionate conservatives” would do the work for them; the new wrinkle today is the TEA Party conservatives and constitutionalists who have become cognizant of the DC games and won’t let the GOP capitulate without exacting a political toll), I think it best to revisit this piece from the last debt ceiling standoff, where the same fear mongering tactics were used to push the GOP into caving. Or perhaps just the appearance of caving. It all depends upon how much of the two party dynamic you believe to be real and how much you believe to be orchestrated political theater with predetermined outcomes that nearly always favor the statists. With thanks to Geoff B, “Can President Obama keep paying Social Security benefits even if the debt ceiling is reached?”
The answer to this question is highly technical. The Bipartisan Policy Center report, which looked closely at the problem, is silent on this issue. We queried the administration about this when Obama made his statement last week, and got a confusing answer. In effect, we were told, the answer is complex but as a practical matter is no, because there would not be enough cash to pay benefits.
But others, including Jason J. Fichtner, a former deputy Social Security administrator during the Bush administration now at George Mason University, believes this explanation is unsatisfactory. He notes that Social Security holds $2.6 trillion in special-issue Treasury securities. Those bonds are part of the $14.3 trillion debt amassed by the U.S. government, and benefits are paid out of those securities.
So, the theory goes, if Treasury redeemed the needed Social Security bonds, and issued new marketable Treasury bonds to make good on the Social Security bonds, it would be a one for one swap and the debt ceiling would not be increased.
There is a technical wrinkle involving the fact that payroll taxes that are collected are supposed to be immediately turned into Treasury securities, but there could be ways around that, such as putting the monies in a noninterest bearing account, as during the 1985 debt crisis. “Although some of the Secretary’s actions appear in retrospect to have been in violation of the requirements of the Social Security Act, we cannot say that the Secretary acted unreasonably given the extraordinary situation in which he was operating,” the General Accounting Office later concluded.
“I’m now 99.9 percent positive that Treasury has legal authority to pay Social Security benefits in both cases of a government shutdown and hitting the debt limit, since the payment of benefits shouldn’t affect the debt limit because it reduces the trust funds to the exact extent that it increase publicly-held debt,” Fichtner said. “What I don’t know is whether Treasury has to pay benefits if it chooses not to.”
Dean Baker, co-director of the Center for Economic and Policy Research who has derided “the phony crisis” of Social Security, also believes the checks could keep flowing. “I would think that they could legally pay Social Security by reducing the obligations of the fund,” he said. “It no doubt would be a huge political issue.”
Late Tuesday night, however, the Treasury Department cast serious doubt on whether it was feasible to keep paying Social Security benefits if the debt limit had been breached.
“This type of financial engineering is untested, may not work, and is of questionable legality,” a Treasury official told us. “It is not feasible for Treasury to borrow from the public, each day, the precise amount of Social Security payments due without breaching the debt limit. In addition, it is questionable whether it is legal to redeem Social Security trust fund assets in advance of payments. Moreover, this presumes that Treasury will have full access to the financial markets if the debt limit is not raised.”
Now, consider the sourcing here: the WaPo’s “Fact Checker” declares the answer inconclusive, citing the Treasury’s protestations. To do so, he has to give equal weight to the politicized chicken-playing of the Democrats and the word of a former deputy Social Security administrator, who knows the ins-and-outs of the system, and who isn’t buying what the fearmongerers are threatening.
This entire exercise dovetails with what I wrote the other day: the progressive endgame is to declare the continuation of such payments “unworkable,” as Jack Lew has already made clear is the plan. But important to remember in that phraseology is that it is only “unworkable” because the President and Mr Lew don’t want it to work: that is, they are willing to cause widespread suffering and hold “lock box” payments hostage in order to force on us our own “willing” subjugation to the state.
And should that fail, they are prepared to declare an “economic” shutdown and seize the power of the purse from the Congress and, in particular, the GOP majority House.
This is part of the progressive coup that began under Wilson and has moved steadily forward until now, when a True Believer and his cadre of political operatives used his manufactured “pragmatic” candidacy and the hope of a national racial cleansing to provide the opening for the Trojan Marxist horse. And now it is at full gallop, the masks all but off.
The real concern has been how the GOP establishment has, when not entirely forced by the base, sided with the proponents of an ever-expanding, increasingly powerful federal government.
In fact, it has been clarifying.
The US will not default; it has money to “pay its bills.” And any talk of the need for the President to unilaterally raise the debt ceiling to avoid default on Congressionally “authorized” spending is a ruse, one that conflates authorization with appropriation. Too, it is an inversion of the intent of language in the 14th amendment which, far from creating a Constitutional Crisis, essentially tells any would-be King that his spending must be constrained, and to do that he has to work with the co-equal branch of the government, the Congress, to make that happen.
The left lies. It’s who they are. It’s what they do.
Arm yourself with the facts and stare down this petulant would-be tyrant. We here don’t much care for kings, particularly those that are self-appointed and propped up by an advocacy media and the Gramsci acolytes that have infested academia like so many noxious bed bugs.
If the time comes, prepare to go rogue.
Or, as I’ve been preaching here — to the derision of some of our more “pragmatic” friends on the right, who enjoy their place in the status quo, which from what I’ve observed amounts to keeping it in tact so that they can rail against it — outlaw.