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    Call his bluff

    Call his bluff

    Obama is bluffing.  He so desperately wants to keep spending at high levels and to increase taxes that he is threatening to withhold social security checks from recipients.

    Republicans should take a reasonsble deal if it is available.  A structure of scaling back spending, even if not what we would want, without tax increases is a deal worth taking.

    But running up another $2.5 trillion in national debt without any constraints on spending is not worth it.  Something has to give, and as Obama says, if not now, when?

    Call his bluff, while being willing to take a reasonable deal of spending constraints and no tax increases.  But…

    If Obama is so hot not to pay social security checks even though there will be enough money on hand to pay those checks, and all other essentials including payments due on the national debt, then let him do it.  Because he won’t.

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    DINORightMarie | July 13, 2011 at 3:03 pm

    I was reading this earlier: “Washington gets $200 billion a month, Social Security costs $50 billion a month, and Obama is threatening to starve Grandma?”

    Time to take it to him. Call his bluff. Not only would there be more than enough money to pay, but since Social Security is a trust fund, it needs to be paid FIRST, just like any debt.

    Excellent post!


       
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      Aarradin in reply to DINORightMarie. | July 13, 2011 at 10:21 pm

      Social Security would be 2nd, actually, after interest on the debt. You don’t screw with the bond markets and you don’t risk the government’s AAA rating on its debt. If the rating goes down, interest goes back up to where it averaged just a decade ago and we find ourselves paying $500 billion in interest per year instead of the $200 Billion we’re paying now.

      Armageddon will be heralded by the bond markets. This is why Bernanke is already considering QE3 (one branch of government printing money to buy bonds from another branch of government) – he’s scared to death of an honest attempt to sell bonds on the open market. China’s been selling, Japan holding, Russia is selling and the big bond funds are either selling or already sold. The biggest buyer of US debt has been the US government. A bond auction without the US Government doing most of the buying would almost certainly result in higher interest on the debt.

    Late to the party, but I think people are missing what is, perhaps, the most important thing that Obama said yesterday – on national television, no less.

    He just told the entire country that Social Security is a sham.

    Yesterday, I heard an American president tell little old ladies that all of the money that their families had been forced – in good faith, mind you – to give to the government for decades not only wasn’t THEIRS, it also wasn’t THERE.

    I’ve NEVER heard any politician admit this – and Obama did it because he is a political lightweight….

    Tina Korbe, a relatively new contributor at HotAir, has embedded a video of Congressional questioning by Kansas Republican Representative Tim Huelskamp of Stephen Goss, the chief actuary for the Social Security Administration, on the specific question of exactly whose call it would be to “stop” making payments of SSI benefits, and why.

    SHORT ANSWER: The Treasury Department. And the actuary explains why in general terms.

    So you are right. Any such move would be directly be pinned on the politicos at Treasury, under orders of Obama.

    Call his bluff!


       
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      Aarradin in reply to Trochilus. | July 13, 2011 at 9:43 pm

      He clarified not only that Obama was lying about not being able to send out checks but also the fact that Social Security can effectively raise cash even if revenues don’t cover expenses.

      Here’s how: That Social Security “Trust Fund” is basically a pile of IOU’s in the form of a ‘bond’ that’s not really a bond (they aren’t backed by the full faith and credit of the government, but that’s not important here), the important thing is that there’s a few trillion dollars worth of them that count against the debt ceiling. To cash them in, they send the ‘bond’ to Treasury for cash, which Treasury doesn’t have, but in cashing in this ‘bond’ they lower the amount of debt the government has outstanding. Treasury can then issue a new, real, bond to the public in exchange for cash it can use to cash Social Security checks. Its a 1:1 deal, for every $1 in trust fund ‘bonds’ cashed in at Treasury, Treasury can issue $1 in real bonds to the public for cash without having any effect on the total debt the government owes.

      Typically, they only cash in Trust Fund ‘bonds’ in an amount equal to the shortfall in the funding of Social Security (it turned a profit every year until last year and is expected to be about $40 billion short this year, so normally they’d cash in somewhere between $3 – $4 billion this August). However, if there is a partial shutdown due to failure to raise the debt ceiling, don’t be surprised if they cash in these bonds to pay the entire month’s worth of Social Security (about $50 billion for August) – since this will allow them to actually raise that full $50 Billion or so in cash by selling new bonds without exceeding the debt ceiling. Obama/Geithner are unscrupulous enough to even go beyond this and cash in more of the Trust Fund than they’re paying out to Social Security in order to not have to cut discretionary spending.


     
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    Aarradin | July 13, 2011 at 9:26 pm

    House Republicans should stop talking to Obama and simply pass a bill.

    Pass a bill in the House that raises the debt ceiling by say $2 Trillion and cuts spending by an equal amount over 10 years. Real cuts – the kind that lower baseline discretionary spending starting next year and therefore result in a lower baseline for every year after. Note that Obama increased discretionary spending by over 70% in his first year in office as a ‘temporary’ measure to stimulate the economy (or so they said) – that ‘temporary’ spending is now considered baseline. House Repubs could take the last Bush budget, adjust for inflation (there hasn’t really been any), and use that as a baseline. That alone would likely net them $2 Trillion over 10 years in ‘savings’. Note that these would be Washington DC savings, in other words: not increasing spending as much as is currently planned. But, still, it’d be FAR cheaper than anything the Dems are trying to do.

    Then, send the bill to the Senate and sit back and watch the circus. Any pressure from Obama or the press can be easily rebuffed: “We’ve already passed a bill to raise the debt ceiling, the ball is in Harry Reid’s court. Nothing can happen now until the Senate passes a bill of their own.” This will force the Senate Dems to actually put forward a bill.

    Senate Dems will then do 1 of 3 things:

    1) Fail to pass, or even put forward, a bill of their own. This would result in a partial government shutdown that is Senate Dems fault alone (note, there’s zero chance of a ‘default’ – anyone that says otherwise is a LIAR or completely ignorant of what will happen. There’s also zero chance that they won’t continue to pay out social security, medicare, medicaid and “essential” military spending).
    2) Pass a bill identical to the House bill and send it to Obama (there’s no chance of this happening either, if you think otherwise you haven’t been watching Harry Reid operate).
    3) Pass a different bill than the House, which also raises the debt ceiling. This bill could be VERY different from the House bill, but would allow the process to move forward. The House and Senate each send a group to Conference to reconcile the bills behind closed doors – this is where a deal can be made. Note that Obama is still out of the loop. Once a deal is reached, both houses have to vote on the changed bill (this is usually a formality as the leadership of both parties by this point are whipping their parties to pass the deal they’ve already struck).

    Finally, it goes to Obama to sign or veto. If he signs, credit for the deal goes to House and Senate leadership (well, the media will credit Obama – but the pushback will be solid: he wasn’t in the room, this wasn’t his deal). If he vetoes, then the partial shutdown will be owned by him personally.

    Frankly, I don’t see why House Republicans are negotiating with Obama at all. The media will give all credit to Obama and all blame to House Repubs, and there’s almost no chance of getting a decent deal. The credit to Obama by the Socialist Press will help his re-election chances. They have a far better chance of getting a decent deal in a closed door Conference Committee negotiation with Senate Dems – at least they’ll have a solid starting point to negotiate since both the House and Senate will have passed bills, Obama refuses to clarify his position – and keeps moving the goal posts – he’ll never write down a word, much less put his position in legislative language. Even if none of that is true, and I’m dead wrong (I’m not), they’d at least be forcing Senate Dems to actually advance a bill on their own, in writing, which they are loath to do.

    Push back hard, play extreme hardball – he is going to crack, and hopefully on live TV. DO NOT give in, YOU’RE RIGHT, Santelli was right: “If not now, WHEN?”

    Stand firm, Bless you Boehner, and Cantor and the rest.


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