by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Let’s expose presidential prevarication. Earlier this year, President Barack Obama warned that Social Security checks will be delayed if Congress fails to increase the government’s borrowing authority by raising the debt ceiling. However, there’s an issue with this warning. According to the 2012 Social Security trustees report, assets in Social Security’s trust funds totaled $2.7 trillion, and Social Security expenditures totaled $773 billion. Therefore, regardless of what Congress does about the debt limit, Social Security recipients are guaranteed their checks. Just take the money from the $2.7 trillion assets held in trust.
Which is the lie, Social Security checks must be delayed if the debt ceiling is not raised or there’s $2.7 trillion in the Social Security trust funds? The fact of the matter is that they are both lies. The Social Security trust funds contain nothing more than IOUs, bonds that have absolutely no market value. In other words, they are worthless bookkeeping entries. Social Security is a pay-as-you-go system, meaning that the taxes paid by today’s workers are immediately sent out as payment to today’s retirees. Social Security is just another federal program funded out of general revenues.
If the congressional Republicans had one ounce of brains, they could easily thwart the president and his leftist allies’ attempt to frighten older Americans about not receiving their Social Security checks and thwart their attempt to frighten other Americans by saying “we are not a deadbeat nation” and suggesting the possibility of default if the debt ceiling is not raised. In 2012, monthly federal tax revenue was about $200 billion. Monthly Social Security expenditures were about $65 billion per month, and the monthly interest payment on our $16 trillion national debt was about $30 billion. The House could simply enact a bill prioritizing how federal tax revenues will be spent. It could mandate that Social Security recipients and interest payments on the national debt be the first priorities and then send the measure to the Senate and the president for concurrence. It might not be a matter of brains as to why the Republican House wouldn’t enact such a measure; it likes spending just as the Democrats.
I believe our nation is rapidly approaching our last chance to do something about runaway government before we face the type of economic turmoil seen in Greece and other European nations.