Obama’s Social Security Fear Mongering Exposes Democrat Lies About The Solvency Of The Program

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Written By:
Rob Port

Jul 12, 2011
12:29pm

Things are getting desperate for President Obama when he has to resort to scaring the bejesus out of the elderly in order to strengthen his debt cap negotiation position.

President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

But, what about the Social Security trust fund? Isn’t that what Democrats cite when Republicans point out that the Social Security program is in trouble?

Just the other day Rep. Xavier Becerra, D-Calif., asserted in a committee that Social Security had “never contributed a dime” to the national debt. This is because Social Security benefits are paid directly out of Social Security taxes, and even though the program is paying more out in benefits than it is collecting in revenues, Democrats tell us that the program has a $2.3 trillion trust fund.

So how is it that Obama can assert that issuing Social Security checks would have an impact on the debt cap if the program isn’t contributing to the national debt?

As Republicans have been pointing out, there is no trust fund. There is only Treasury bonds which were issued when the federal government spent the money in the trust fund. In order to pay money out of the trust funds the Treasury must make good on the bonds, which means new spending financed (because the Treasury is empty) by borrowing.

Which brings us to Obama’s assertion that Social Security checks might be in jeopardy if the debt cap isn’t raised. Of course, the government could keep making Social Security payments and instead cut spending elsewhere to stay under the debt cap. Obama really is just scare mongering. But it does expose the big lie Demcorats have been telling us about Social Security for some time.