This article alleges with a default, the SS checks might not go out....

[steve2470]

Please critique this. Thanks in advance.

Who will suffer if there's no debt-ceiling deal

http://news.yahoo.com/suffer-theres-no-debt-ceiling-125756960.html

<snip>

Almost everything else the government pays for, however, would be vulnerable to sudden cutbacks. Here's who would feel the pain most abruptly:

Social Security recipients. The government is due to deliver $23 billion in Social Security payments on August 3, according to forecasting firm IHS Global Insight. If the government is forced to cut 40 percent of its spending, these Social Security checks may not arrive. The suddenness with which the political battle in Washington will hit the wallets of ordinary Americans is one reason many analysts assume that a true impasse over the borrowing limit will be short-lived. But it could still be damaging. Social Security recipients who depend on their checks to pay other bills could end up running behind, incurring costly late fees or damaging their own credit. And it's no guarantee that if stopped, the government's check-writing machinery will start up again without delays or snafus that hold up checks even longer.

<snip>

ETA: revised subject line

[PoliticAverse]

1. Bernanke yesterday assured bond holders they'd be paid but Social Security recipients wouldn't...

if the debt limit is hit.

[lumberjack_jeff]

8. self delete

[lumberjack_jeff]

2. No. SS payments are not subject to the debt limit impasse.

The government doesn't need to borrow money to pay SS recipients.

Caveat: the government printing office and some of the employees which process claims are paid for by borrowed money, so it is possible but unprecedented that those who get paper checks via the US Mail might be delayed.

[Skink]

3. Republicans probably view Social Security as stimulus for the economy.

[elleng]

4. 'Direct Deposit ' SS will go out. Facts here.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1478750&mesg_id=1478750

[steve2470]

5. ok thank you very much for that info !! nt

[PoliticAverse]

6. Please stop quoting that Politifact article which was about the 'government shutdown'

which is different than the debt limit.

[Roselma]

10. Not necessarily. Since there may not be money

in the coffers to pay out, the government cannot write checks that would be returned for insufficient funds. It is a crime, potentially punishable by imprisonment. That link you referred was regarding the February potential government shutdown over the budget impasse. This is a debt ceiling situation. They are different. Republicans are arguing that the SS administration could simply cash a bond from the SS trust fund. Problem is, guess who'd be expected to cover the bond? Yup...the treasury, and the treasury might not have the money to cover the bond. It's kinda crazy. Then another thought was that the treasury could sell the SS trust fund bond to another country (China maybe). The problem with that idea is that another government would have to be willing to actually pick up a bond from a debtor whose credit rating had just dropped dramatically. I think that we all need to prepare for the possibility that there won't be money to pay out ALL of the SS recipients on the day that they are due. Each week, the treasury brings in money from tax collections, so maybe they could arrange to pay some SS one week, some SS the next week, and so on.

[PoliticAverse]

7. "there would have to be significant cuts in Social Security, Medicare, military pay "...

"So this is a matter of arithmetic," Bernanke said.
"Fairly soon after that date, there would have to be significant cuts in Social Security, Medicare,
military pay or some combination of those in order to avoid borrowing more money."


http://www.cbsnews.com/stories/2011/07/13/eveningnews/main20079288.shtml

[liberalla]

9. This is one way to rile up citizens and get pressure on Repugs

You threaten their SS payments, and people NOTICE! Watch out.

Do this NOW: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1488260 ">Today is NATIONAL BUDGET CALL-IN DAY! (Call toll-free)

:kick:

[lumberjack_jeff]

11. The social security administration will send money to the treasury to cover the checks.

The treasury department, under orders of the President, can simply withhold payment to recipients.

http://www.foxnews.com/politics/2011/07/13/report-backs-obama-warning-that-social-security-checks-at-risk-in-debt-crisis/

Rep. Tim Huelskamp, R-Kansas, said Wednesday that if the administration were to withhold Social Security payments, it would be a "political decision" because there are "sufficient receipts" to cover the checks.
Social Security Administration actuary Stephen Goss told Huelskamp at a hearing that it would be up to the Treasury Department to send out payments.
Meanwhile, seniors are left wondering whether they'll get their promised retirement benefits.
Washington is obligated to pay Social Security benefits, but a Congressional Research Service report last month confirmed that the Treasury Department can delay them if necessary.
"Social Security benefit payments may be delayed or jeopardized if the Treasury does not have enough cash on hand to pay benefits," reads the report, which notes that the Treasury occasionally needs to issue debt to pay benefits, and a failure to raise the ceiling could make that impossible.
A Government Accountability Office report several decades ago also said it is "generally recognized" that, in the event of a national default, the government would be precluded from honoring some obligations -- including Social Security benefits, employee wages and other payments.

[originalpckelly]

12. We borrow 40% of what we spend.

When you see that, it becomes clear something is up and we need to raise taxes. And have some spending cuts too, in military primarily.