About This Blog
In 2010, Republicans won the midterm elections by promising to cut federal spending without raising taxes. So far, the Republicans have attempted to do exactly what they promised to do. Some Republicans have even offered further tax cuts in the hope it would stimulate job creation. They've done these things at the risk of their own political careers, because talking about cutting spending in general is something the voters like, but when actual spending cuts are specifically proposed, the voters tend to like it a lot less, especially if the cuts affect them personally. Most people like their own gravy train. It's the gravy train of the other fellow they have a problem with. Whether you agree with the Republicans or not, at least they have been attempting to deal with our two biggest problems, deficits and jobs, while holding to their campaign promises.
Until very recently, Democrats have been willing to do little about the deficits, other than complain about what the Republicans were doing. The Dems have been playing politics instead, angling for an advantage in 2012. But with the sword of Damocles hanging over their heads in the form of the debt ceiling, the Republicans forced the hand of the Democrats. So the Democrats held out a carrot and came up with a $4 trillion deficit reduction plan. President Obama held out the same carrot, even going so far as proposing raising the retirement age (not new for Democrats), along with other unspecified cuts to Social Security and Medicare (that would probably never happen). But the carrot had some strings attached. If the Republicans grabbed the carrot and went along with the Democrats, they would have to break their campaign promises and agree to $2 trillion in tax increases. Then the Democrats would use that broken promise against the Republicans in the 2012 elections, much as they did when they used "read my lips, no new taxes" against President Bush Sr. in 1992, after Bush went along with a tax increase in return for Democrat promises of spending cuts that never materialized. Gotcha.
This time, the Republicans stuck to their no tax increases pledge, and the deal was scuttled. Now Obama and friends say 'see, the Republicans don't really want to reduce the deficits'. It was the classic 'heads I win, tails you lose' scenario. Obama is pretty clever when it comes to playing politics. I will give him that much.
The problem is, the sword of Damocles is still there, and the thread is about to break. The debt ceiling must still be addressed.
Enter Obama, the political game player:
The checks -- about 70 million of them -- might not be in the mail.
That’s the warning President Barack Obama gave Tuesday for Americans receiving Social Security benefits if Congress fails to agree on raising the nation’s $14.3 trillion debt limit by Aug. 2.
“I cannot guarantee that those checks go out on Aug. 3 if we haven’t resolved this issue,” Obama told CBS News.
“There may simply not be the money in the coffers to do it,” he said, adding that veterans’ checks and disability benefits also could be affected.
Uh oh !!! Run for the hills !!! The sky is falling !!! If there was ever a politician who was trying to scare the bejesus out of the public, Obama has to be the all-time champ in that department. No Social Security checks ? No disability checks ? Holy Krike !!!
Hey, wait a minute. What about that $2.5 trillion we have in the Social Security Trust Fund, as the Democrats have been telling us ??? What about Social Security being financially sound until 2037, as the Democrats have been telling us ???...
SUCKERS !!! You've been had. As anyone who follows this blog already knows, there's nothing but IOU's in the Social Security Trust Fund. Congress spends your "Trust Fund" money as fast as it receives it. The only way we can access any of those SS "assets" is by BORROWING MORE MONEY, which I believe the debt ceiling would prohibit (though I'm not sure. If anyone knows, please inform).
More importantly, is Obama telling the truth ? Would there be enough money to cover SS and disability checks in August ? Yes, there would be enough money to send out the checks. Obama is full of it. He's just engaging in scare tactics for political gain. Here's a chart Goldman Sachs prepared from U.S. Treasury statistics, showing federal revenues and expenses in August:
The only way there wouldn't be enough money is if the federal government CHOSE not to send out the SS and disability checks, and spent the money elsewhere instead. While we would face a shutdown of a sizeable portion of the government if the debt ceiling isn't raised, essentials like SS and Medicare could be maintained. If the debt ceiling impasse went on long enough, maybe the checks would have to be reduced in size, but that definitely won't happen in August, unless Obama WANTS it to happen.
But when the President Of The United States is despicable enough to say the checks might not go out, people are rightly scared to death, which is the whole point of Obama's tactics. This is all about politics to our President, and nothing else. Remember, this is the very same man who voted AGAINST raising the debt limit in 2006, when he thought the politics would benefit him by doing so. He wasn't worried about checks going out then.
In reaction to Obama's faux armaggeddon rhetoric, Senate Minority Leader Mitch McConnell (R-KY) introduced his "backup plan" legislation, a contingency for what would happen if the debt limit ceiling isn't raised:
A visibly frustrated McConnell said he hoped a significant agreement was still possible, but noted that the decision to introduce this measure was the result of growing concern about the president’s seriousness regarding the negotiations. “I had hoped all year long that the opportunity presented by [Obama's] request of us to raise the debt ceiling would generate a bipartisan agreement that would begin to get our house in order by reducing spending,” he said with an exasperated laugh. “That may still happen . . . But we’re certainly not going to send a signal to the markets and the American people that default is an option.”
The plan essentially places the entire impetus for raising the debt ceiling on President Obama and congressional Democrats....McConnell’s plan, in part, would require President Obama to recommend detailed spending cuts of equal of greater value to the amount of debt increase being requested. This comes in response to GOP critics who accuse the White House of not having a plan of its own to reduce the deficit (beyond raising taxes).
In short, if the checks don't go out, McConnell wants to make sure that decision falls squarely on Obama and the Democrats' shoulders. McConnell's bill essentially asks this question - 'Mr. President, you ARE willing to cut $2 trillion in future spending in order for Grandma and Grandpa to receive their checks, AREN'T YOU ???"
Game on, and back to you, Barack.