Congressman Dennis Kucinich put up a scathing attack on the President today. His beef? That the President said in his speech last night that should Congressional irresponsibility lead to the first ever default by the United States government, lots of government payments, including perhaps social security checks may not be able to go out - at least not on time. That made Kucinich livid. Wrote Kucinich:
Social Security is 100% wholly funded up to the year 2036 without any changes whatsoever. It has no place in the debt ceiling debate at all. Furthermore, it is not the government’s money but the money of the workers who have paid into the program their entire lives.
Threatening the withholding of Social Security checks to advance an agenda that includes cutting Social Security benefits is not befitting of the Democratic Party, it is not fair to the American people, and it represents a sellout of the interests of seniors.
This is absolutely mind-blowing. First of all, for someone accusing the President of not being candid, the Congressman is not intellectually honest that President Obama wants to "cut" Social Security. There are no cuts in the calculation of one's basic benefits; none. Kucninich's rhetoric, then, leads you to one of three conclusions: (1) Dennis Kucinich is wholly ignorant of how the social security trust fund works, or even what it actually is, (2) Dennis Kucinich is concealing his knowledge and playing dumb for the sake of ginning up outrage, or (3) Dennis Kucinich does not really believe that a default is a big deal.
Be that as it may, I'm less worried about Kucinich's own view of this thing than I am about setting the record straight. What Kucinich calls a threat is actually purely mathematical. That Social Security checks (along with other individual assistance) may be impacted by a default is not a matter of threat. It's math. those who are likely to read and believe him. It's not that difficult to see why social security checks are directly jeopardized by a default: because the social security trust fund is one of the largest creditors to the US treasury!
Maybe Congressman Kucinich needs a refresher course on how the social security trust fund actually works, but the down and dirty of it is this: there is no cash sitting in the Social Security trust find, or any of the government's trust funds, for that matter. The social security taxes come in, and immediately all of it is used to buy "special issue" treasury bonds. The Social Security Administration (SSA) simply cashes those bonds when it's time to pay benefits. That is debt that is counted within the debt ceiling. If the debt ceiling is not raised, then the government runs out of about 40% of the total money needed, and SSA might well not be able to get the bonds cashed.
But isn't social security taxes coming in each month? Why not just use what's coming in to pay the benefits, and we are all good. Right? Except that last year - six years ahead of schedule - SSA started paying out more in benefits than it intakes in taxes. So if you do not have enough taxes coming in to cover the outlay, and you cannot cash the bonds from the treasury, a cut or a delay in payments is not a threat, it is quite likely a reality.
But even if we were able to pay all the social security checks on time next Tuesday, what about everything else the government pays for? Remember that not having a debt limit increase will deprive the government of over 40% of the money it needs to fund things that Congress already authorized. Just whose benefit is Congressman Kucinich willing to jeopardize? Medicare and/or Medicaid payments? Veterans benefits? Combat pay for soldiers? Pell grants for students? Disability payments? Food stamps? Housing assistance for the needy? Federal support for local k-12 education? Just whose checks is the Congressman prepared to surrender?
Social Security, Social Security Disability, Medicare, Medicaid, food stamps, student assistance and other assistance to individuals account for over 64% of the federal outlay, and only 58% comes without additional borrowing. Someone, somewhere is going to lose assistance if a default were allowed, even if we only paid for assistance to individuals, not counting federal salaries. Even if we did not pay a penny to the Pentagon, to internal security, brought all the troops home tomorrow from everywhere in the world (as if that won't have its own costs), to our embassies and stopped all foreign aid, or even to keep the lights on in Dennis Kucinich's (and his fellow Congresscritters') office and laid off all federal employees, the recipients of need-based services and entitlement programs would still be jeopardized. That is not a threat, Congressman. It's math.
A NOTE FOR MY OWN SANITY IN THE COMMENTS: I will not be responding to comments anymore about trying to turn the subject of the diary on its head and have comment-by-comment debate about whether the President really wants to cut Social Security. This diary is not about that. It is about Kucinich accusing the President of issuing a "threat" by mentioning a mere mathematical fact. Whether or not the President "wants to" cut social security, and whether a chained-CPI COLA is a "cut in benefits" has nothing whatsoever to do with whether or not a default is likely to affect social security checks. As I have said before, those who want to flame are welcome to do so on their own, but my attempt will be not to add to it. Thank you.