Question about the Debt Limit?

majorwhiteapples

majorwhiteapples

5,000+ Posts
I heard that the President didn't know if SS checks would be paid if the debt ceiling limit was not raised.......one of three things here, either the President does not know the Debt ceiling has nothing to do with SS.....I don't understand how SS is intertwined and the President decides who gets checks or not......or third he is just flat out playing politics and trying to scare SS receipients to support his policies.

IF one is true, we are in deeper trouble than I thought, and my thoughts are that it is pretty deep.

IF two is true, I don't understand what the debt ceiling pertains too and or the power of funding what.

If three is true, sad very sad, and the guy during the State of the Union had it right on the head, "You Lie!!!!".

So sad this president is........
 
Karl Rove was on Fox the other night. He gave the following figures:

Aug. 2011 Est. Gov. Revenue = 203B
Aug. 2011 Est. Gov. Expenses = 362B
Expected Shortfall = 159B

First of all, I think that illustrates our problem as well as anything I've seen (if accurate). We owe 78% more than we take in.

The government can apparently spend the 203 billion anyway it wants to, it just can't go over that unless the debt ceiling is raised or, unless our President decides to flip the bird at Congress and site the 14th Amendment and ignore the debt ceiling, which won't surprise me.

As far as the government "shutting down" that's not going to happen. They may send non-essential personnel home, but I'm sure the people that send out the checks are not in that group.

I think the Aug. SS bill is $75 billion, so there's plenty of money to pay for it. Obama is just playing the old folks like the heartless bastard that he is.
 
I wonder how many of the SS recipients receive direct deposit?
And even those who still get checks isn't this prety automated up to the point of getting the physical checks to the post office?

Since the post office is only a quasi gov't entity I am not sure it would shut down

BUT let's say Obama really wasn't trying to scare the elderly. Wouldn't it have been better for him to say what the hold up would be abnd that he was working on a contingency plan?

The weay he hung the elderly out there was designed to scare them.
 
Let's say the debt limit were not raised, and the government were forced to spend only the revenues received. At present, the government collects about $2.2 trillion and spends roughly $3.7 trillion.

Per this link in 2010 the total expenditures for social security and medicare were $1.235 trillion. The money taken via the payroll taxes was $1.267 trillion. Practically the same amounts. With the 2% reduction in social security taxes this year, the 2011 revenue may be slightly less than projected expenditures.

So the other revenue taken in by the treasury - mostly income tax and also corporate tax - is only about $1 trillion.

Assuming that the revenue for social security and medicare were used to disperse benefits, that could be done. That would leave about $1 trillion for the other $2.5 trillion obligations. Interest on the debt would likely be paid. I don't know the amount, I suppose it's about $300 to $400 billion. That leaves about $700 billion. Currently, defense spending eats up about that amount. That leaves zero. So goodbye to all the agencies (IRS, EPA, FDA, Homeland Security, dozens of others, food stamps, etc.). With those furloughs, you now have another million or so people out of work. Revenue decreases (they aren't paying taxes any more), and now you don't have enough to pay all the social security/medicare obligations.

But you could make cuts in the defense budget. Let's knock off about $200 billion. Of course, this means furloughs not only in the military, but also layoffs at Ratheon, Lockheed, Haliburton, Xe, etc. as there is less money for government contracts to be paid. And now the economy contracts even more, unemployment rises, and revenue decreases.

And so on. And so on.

It's not a pretty picture. We continue to do as we're doing now, and eventually the debt load leads to implosion. We make drastic cuts now, and we dive into a severe depression. Pick your poison.
 
I think that is what Boehner meant by negotiating with Jello. It sort of melted away. Nothing on paper. Etc.
 
quote]See- the thing is, many economists, and other Americans believe the proposal on the table already proposed by Obama (massive cuts WITH a modest tax hike for top 1%) is a very sensible way to reduce the debt.
 
Obama NEEDS the tax hikes, even if they only increase revenue .000001%, in order to save face in the eyes of his base. Without them he appears weak -- not only capitulating to the republicans, but also undermining the core democrat election strategy in place since the new deal. Not going to happen.
 
mcbrett,

After sending up a budget in February that would only add to government spending and deficits, President Obama has now come around to the view that "it is a moral imperative to tackle our debt and deficits in a serious way." Both sides have to make sacrifices, he says. It is time to "eat our peas." The president's evident purpose is to put the blame on Republicans for failing to come to an agreement.

But the absence of any written budgetary documents and the closed-door nature of the negotiating sessions make it impossible to tell which side is being "serious" and which side is being intransigent. Instead of specific proposals, scored by the Congressional Budget Office (CBO) and open to examination by press and public, we get vague generalities about "trillions" of dollars in supposed savings based on who-knows-what changes in policy.

It is insane to think that tax and spending proposals of this complexity can be negotiated at this level of generality and put into statutory language in a matter of weeks. Didn't the health-care fiasco teach us anything about the importance of transparent and responsible legislative process?

Wise or foolish, this budgetary game of chicken is contrary to law. In 1974, Congress enacted the Congressional Budget and Impoundment Control Act, which sets specific deadlines and procedures for raising revenue, setting spending priorities, and adjusting the debt limit—all in the sunshine of public scrutiny, with objective evaluation of all plans by the CBO.

The president must submit a proposed budget "on or before" the first Monday in February. The CBO then has until Feb. 15 to score the proposal in accordance with criteria set by the statute. Those criteria are somewhat arbitrary, but their virtue is to apply the same metric to all competing proposals.

President Obama met the deadline, but his proposed budget was so out of touch with economic and political realities that the Senate rejected it by a vote of 97-0. In April, the president changed course and made a speech in which he proposed a new "plan" he claimed would decrease the deficit. The terms were so vague that CBO Director Douglas Elmendorf told Congress he could not score it. In effect, then, the process started off without the presidential budget required by law.

The Budget Act requires the Budget Committees of both the House and the Senate to hold hearings on the proposal, allowing testimony on the budget from the administration, "national organizations" and the "general public." This guarantees transparency and democratic accountability, which have been sorely lacking in the recent closed-door negotiating sessions.

By April 1, according to the Budget Act, the House and the Senate must either adopt the president's budget or put forward an alternative. They cannot just hide in the weeds. The House and Senate reports must detail any differences from the president's budget and explain the "economic assumptions" underlying them. By April 15, Congress must adopt a concurrent resolution embodying a congressional budget. Appropriations bills must stay within this budget or be subject to a point of order.

The House of Representatives complied with the law, passing a budget that would reduce spending by an estimated $5.8 trillion over 10 years (according to the CBO). The Senate has not passed a budget. In fact, the Senate has not passed a budget since 2009.
.
This defiance of the Budget Act is responsible for the current blamefest in Washington. The law was intended to bring transparency and timeliness to debates over taxing and spending. All proposals are public, and all are scored by the CBO according to the same metric. This makes it difficult for politicians to shift blame. This year, without a genuine presidential budget, or any Senate budget, the negotiations are shrouded in fog. The president may tell press conferences that he proposed $3 trillion in spending reductions, but there is no way to know what that means without a budget.

To give some pertinent examples: We have no way of knowing whether the president's claimed reduction in deficit spending is based on current spending or on projected spending. The difference is probably about $1.8 trillion over 10 years.

Likewise, we have no way of knowing whether the proposed spending cuts are real. All too often in past budget deals, the "spending cuts" were based on gimmicks, or on promises of future cuts that never actually were made. For example, Congress has promised to pay doctors, hospitals and drug companies less for performing the same services. This never really happens.

The House budget contains a specific proposal for reducing the future cost of Medicare. The administration prefers an expert commission that will supposedly find hundreds of billions of dollars in painless savings from undisclosed changes. A real budget would specify the changes so that the public could compare the two alternatives.

Some observers claim the president has simply offered his own April plan as a "compromise" and told the Republicans to take it or leave it. The public has no way to know.

The Budget Act was designed to force all competing plans to be disclosed publicly and evaluated according to the same baselines and criteria. It is too late to meet the Act's deadlines, but our leaders could still comply with its spirit.

If the president would put his plan into budgetary language, as the House already has done, and make it available to the CBO, the public could readily see who is being serious in the negotiations. We would know whether we have been offered a bracing helping of peas, or a misleading mess of pottage. As it is, the president has put a covered dish on the table and, thanks to noncompliance with the Budget Act, we do not know what it contains.

Mr. McConnell was assistant general counsel of the Office of Management and Budget from 1981-83 and is now a professor of constitutional law at Stanford University and a senior fellow at the Hoover Institution.
 
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