Yesterday President Barack Obama played the Social Security card in the debt ceiling negotiations, saying he wasn’t sure benefit checks would go out as scheduled on August 3 without a deal — but was he fear-mongering as Republicans said?
“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” he told CBS’s Scott Pelley in an interview.
But The Washington Post’s Fact-Checker Glenn Kessler reports that there are multiple ways for the benefits to be paid out — even if the August 2 deadline passes.
One such proposal would be to take the special-issue treasury bonds held by the program’s trust fund and convert them to marketable securities. This would free up the needed cash for the payments, without violating the debt cap.
Yet another is to turn over social security payroll taxes directly into benefit checks. This plan would require the Treasury Department to skirt the requirement that the tax revenues go into the trust fund, but a similar solution was adopted in 1985.
Kessler’s bottom line is that Obama is hiding behind the conditional, and should state clearly whether the Treasury Department can juggle payments to make sure seniors get their checks.
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