Breaking: No Social Security Checks on August 3rd? (& Open Thread)
By Bronwyn's Harbor on July 12, 2011 at 5:16 PM in Current Affairs
CNN is reporting that those affected will also include active members of the military and students who depend on Pell grants. Imagine the reaction of soldiers, students, veterans and seniors who will see this CBS News headline, the top story at Memeorandum: “Obama says he cannot guarantee Social Security checks will go out on August 3.”
This is the fault of Republicans and Democrats in Washington, D.C. because both are milking this “crisis” to make points against the other side, while they reside in their cushy bubble, in the only city in the U.S. in which real estate prices have actually risen. Do they realize that this means that families that wait anxiously every month for those checks will be unable to pay their rent, let alone groceries, utilities, child care, insurance, and on and on? And that, if people cannot pay those bills, landlords, grocery stores, insurance agents, and local utilities will also be adversely affected?
There may be a new workaround, provided Congress and Obama approve (?). Four minutes ago, the New York Times posted breaking news from GOP Senate leader Mitch McConnell, “McConnell Proposal Gives Obama Power to Increase Debt Limit“:
The Senate Republican leader, Mitch McConnell of Kentucky, said Tuesday that a bipartisan budget deal with President Obama is probably out of reach, and he proposed a plan under which the president could increase the federal debt limit without prior Congressional approval for offsetting spending cuts.
Mr. McConnell’s proposal reflected a growing sense of pessimism on Capitol Hill about the prospects that Mr. Obama and Congressional leaders could come to terms on a budget deal before the government’s borrowing authority hits its limit on Aug. 2.
[...]
Mr. McConnell’s proposal would give Mr. Obama sweeping power to increase the government’s borrowing authority, in increments, by up to $2.4 trillion – enough, it is estimated, to cover federal obligations through next year – only if Mr. Obama specifies spending cuts of equal amounts. But Congress would not have to approve the spending cuts prior to the debt-limit increase.
It is not clear whether House Republicans would sign on to such a measure, given their drive to extract deep spending cuts in return for any debt-limit increase.
Mr. McConnell, who after the midterm elections last November said Republicans’ goal would be to make Mr. Obama a one-term president, said in his Senate speech, “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.”
At the White House, press secretary Jay Carney responded, “This president’s going to be in office for at least another 18 months, and I think the American people expect Congress to work with him.”
With the Aug. 2 deadline for raising the government’s $14.3 trillion debt limit just three weeks away, Tuesday seemed to mark a new low in the summer’s maneuvering between the White House and Congressional Republicans to agree to a debt-reduction package that would clear the way for a vote on the debt limit. …
Read all of “McConnell Proposal Gives Obama Power to Increase Debt Limit.”
Here are some sections of “Obama says he cannot guarantee Social Security checks will go out on August 3,” the CBS News story cited in the first paragraph:
President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.
“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,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2.
Lawmakers from both parties want to use the threat of that deadline to work out a broader package on long-term deficit reduction, with Republicans looking to cut trillions of dollars in federal spending, while Democrats are pushing for a more “balanced approach,” which would include both spending cuts and increased revenue through taxes. [...]
It is disgusting that both sides seem unable to come to agreement before August 2nd. Democrats are charging that the GOP’s recalcitrance is because they realize that a bad economy in 2012 will likely mean that Republicans will be rewarded with the presidency and majorities in Congress.
While I’d like to believe, idealistically, that the Republicans are above such tactics, I do wonder. David Brooks, the conservative columnist for the New York Times, wrote a heck of a column last week on the opportunity that the Republicans are passing up. It’s a must-read and I encourage you to click the link to “The Mother of All No-Brainers,” and read what Brooks has to say about the GOP’s tactics. It is important to read the full column to get Brooks’ points, but here’s an excerpt:
The Republicans have changed American politics since they took control of the House of Representatives. They have put spending restraint and debt reduction at the top of the national agenda. They have sparked a discussion on entitlement reform. They have turned a bill to raise the debt limit into an opportunity to put the U.S. on a stable fiscal course.
Republican leaders have also proved to be effective negotiators. They have been tough and inflexible and forced the Democrats to come to them. The Democrats have agreed to tie budget cuts to the debt ceiling bill. They have agreed not to raise tax rates. They have agreed to a roughly 3-to-1 rate of spending cuts to revenue increases, an astonishing concession.
Moreover, many important Democrats are open to a truly large budget deal. President Obama has a strong incentive to reach a deal so he can campaign in 2012 as a moderate. …
[...]
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.
This, as I say, is the mother of all no-brainers.
But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The members of this movement do not accept the logic of compromise, no matter how sweet the terms. …
Read all of Brooks’ column, “The Mother of All No-Brainers.”
Come August 3rd, I just hope that the millions of Americans who count on those checks — from the active military to senior citizens — will not pay a huge price for the political gamesmanship going on in D.C. It is absolutely disgusting, no matter whose fault it is.
by Ronald Scott
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