Posted on 01/15/2013 2:24:00 PM PST by nickcarraway
In his first press conference of the year that very closely resembled a territorial stakeout, President Obama addressed a national audience Monday speaking largely to an impending debt ceiling crisis.
“America cannot afford another debate with this Congress about whether or not they should pay the bills that they’ve already racked up,” Obama declared.
If Congress fails to raise the debt ceiling, the president warned the consequences could be dire-delayed social security checks and veterans’ benefits, for starters.
President Obama also mentioned potential disruptions to compensation for troops and small business owners, and even “food inspectors, air traffic controllers and specialists who track down loose nuclear materials.”
Further examination of a potential fallout, however, reveals that many of these fears may be unfounded.
The Bipartisan Policy Center, in a recent report on the debt ceiling, finds that it would be next-to- impossible to predict which programs would be affected under a default. That’s because the U.S. government literally has more than 100 million different payment obligations, and since the country has never failed to meet its obligations before, there isn’t a known prioritization plan.
Here’s what we do know for sure: -Without further action, the U.S. will default on its loans sometime between February 15 and March 1 -Pending default, the only money the government can use to meet obligations is daily cash inflows, or revenue -Those revenues will not cover about 40 percent of the government’s debt obligations -The Treasury will have to pick and choose which programs it deems most important to fund
The president’s assertion that “specialists who track down loose nuclear materials wouldn’t get their paychecks” is untrue, because nobody knows who will be impacted under a default scenario.
Another questionable claim made in Monday’s address is that social security checks will be delayed for millions of recipients.
According to Nancy Altman, co-chair of the Strengthen Social Security campaign, and Mark Scarberry, law professor at Pepperdine University, the government can actually supply funding for Social Security without touching the national debt.
Social Security has its own dedicated income stream, explain Altman and Scarberry, as well as a reserve of trillions of dollars invested in treasury bonds.
Those bonds are technically counted as part of the federal debt, meaning if the Social Security Trust decides to redeem a certain percentage to pay out benefits, it would actually lower the U.S. debt obligation.
The government, in turn, could raise newly-freed money on the bond market, shifting its obligations from inter-government to private investors.
Confused? All you need to know is that if the government chooses, it can prevent a disruption in social security checks.
Obama would never mislead.
"Some?"
Anything that POS says or anyone he’s associated with isn’t dubious, it’s an outright lie.
I hope that the American voters are happy with the lying SOB that they re-elected!!!!!
In a country where journalists were inquisitive instead of partisan, all of Obama’s claims would be found to be dubious. Where shall I start?
Social Security has its own dedicated income stream, explain Altman and Scarberry, as well as a reserve of trillions of dollars invested in treasury bonds.
Those bonds are technically counted as part of the federal debt, meaning if the Social Security Trust decides to redeem a certain percentage to pay out benefits, it would actually lower the U.S. debt obligation.
The government, in turn, could raise newly-freed money on the bond market, shifting its obligations from inter-government to private investors.
SS has already been running in the red since 2010. It has been making up the shortfall by redeeming the non-market T-bills in the SSTF using the General Fund.
What the professors failed to note is that although the SSTF is part of the national debt and redeeming the T-bills will lower what is in the SSTF, we still borrow 42 cents of every federal dollar so it is not a one for one transaction in terms of the reduction of the debt. Moreover, the SSTF is the biggest holder of T-bills and must be paid interest as part of the national debt servicing expense.
Small business owners get compensation too? My husband is a small business owner, where do we sign up for this?
Who else do you know like that? No one I know.
Comeuppance is coming.
NBC?? What am I missing that they say the WON LIED?
Withhold payment where ever it will cause the most chaos and disruption.
Then declare martial law, suspend all laws, and rule by decree . . .
due, of course, to the chaos and disruption.
That should do it.
They just bring themselves to say that the dirty, rotten, Kenyan bastard is lying again.
Too fed up to type right.
Yup! I tried to convince some FR that it would be better to elect the lesser of the two evils. All I got was static. Come on now all you Romney haters lets hear from you now.
“speaking largely to an impending debt ceiling crisis.”
This idiomatic usage grates on me. Then again, it’s so much more pleasant to wallow in grammatical nuance than face all the unpleasant realities in the news these days.
Anyone else?
http://grammarist.com/usage/speak-to/
I call BS on this one. The way the Treasury gets the funds for these IOUs is by issuing more bonds to the markets at large (or these days, perhaps to the Fed). It's a wash--if the SS debt is redeemed, it creates more debt, as long as we are running a deficit.
“Social Security has its own dedicated income stream”
Lie.
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