Legal Experts: Obama Social Security Hysteria is a Lie




by Ben Johnson, The White House Watch

The scare and intimidation tactics the president has employed during the debt ceiling debate have grown so outrageous that two experts on the Social Security system are imploring Barack Obama, “Mr. President, please stop needlessly scaring the millions who rely on Social Security benefits.”

Obama warned in his nationally televised speech on Monday night that if Congress does not vote to raise the debt ceiling by August 2, “we would not have enough money to pay all of our bills -– bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses. ”

Social Security historian Nancy Altman and Pepperine Law School professor Mark Scarberry have noted that, in fact, no such threat exists. They write that, while it is true “employer and employee contributions are less than the cost of all benefits plus all administrative costs,” those contributions “are just one source of Social Security revenue.” Another source is investments backed by the “full faith and credit of the United States,” which the president and Treasury Secretary Timothy Geithner can cash at any time they like:

[T]he government bonds held by the Social Security trust funds, $2.7 trillion worth, provide the guarantee that benefit checks can go out in full and on time, whether or not the debt ceiling is raised.

Social Security’s trustees, in particular its Managing Trustee, Treasury Secretary Geithner, are entitled to demand that those bonds be redeemed – cashed in – by the Treasury to whatever extent is necessary to provide the money to pay benefits. Because the principal amount of those bonds is part of the debt that is subject to the $14.3 trillion debt ceiling, every dollar of principal paid to redeem the bonds creates room under the ceiling for the Treasury to borrow more money from the public. Enough could be borrowed back to replace all but a tiny fraction of a percent of the money used to redeem the bonds (all but the very small amount of interest that would have accrued since the semiannual interest was paid on June 30). In effect, the Social Security trust funds’ bonds would be replaced with bonds owed to the public. Nothing would be added to the total debt, and the trust funds’ bonds would be used for their intended purpose: to guarantee that benefits are paid.

Their assessment in part echoes Rep. Joe Walsh, R-IL, who has said “there are government revenues to service Social Security checks” well beyond August 2. And they are far from the only experts to do so. Michael McConnell of Stanford University concurs, “this attempt to scare Social Security recipients is without legal foundation.” Thomas Saving, a former public trustee of the Social Security and Medicare Trust Funds, concludes that Obama “either does not understand the way the system works, or the administration intends to spend the money on something else.”

Altman and Scarberry add, as have others, Obama’s failure to pay Social Security in order to gin up political points with seniors — or, more sinisterly, to allow them to starve to death — will earn a harsh legal backlash. They write, “The trustee of a private pension trust who refused to make pension payments, despite having ample trust assets, would rightly be held to account.”

The legal repercussions for a sitting president who made such a decision would be impeachment. Would Congress have the guts to follow through with such a course? My advice is, Don’t chance it, Barack.



About Ben Johnson

Ben Johnson is the editor of several conservative websites. A seasoned journalist, he has broken a host of news stories of national importance and written sizzling editorials that started the nation talking. A former talk show host, he has been a guest on The Michael Savage Show, Nothing But Truth with Crane Durham, Crosstalk on VCY America, The G. Gordon Liddy Show, The Bob Dutko Show, and scores of local programs. The Managing Editor of FrontPage Magazine (2004-2010) and previously its Associate Editor (2003-2004), he is the author of three books. He maintains his own website, TheRightsWriter.com, which you can view here. You can contact him here.
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7 Responses to Legal Experts: Obama Social Security Hysteria is a Lie

  1. J. Madsen says:

    How can this man be allowed to continually lie with ZERO recourse? Can you imagine if this were Bush? Does the lamestream media just vacation when a Democrat is in charge? Simply ask yourself this: Could Obama get hired to do your job? Could he pass the background check? Could he provide the necessary 2 forms of identification? Yet he can be president? I truly think this man could say ANYTHING and his base would believe him. Scary no?

  2. TaterSalad says:

    The video that the Obama administration does not want you to see!

    Here is proof of one of the many elaborate Welfare Housing Projects paid out of the Social Security budget. How can Barack Obama tell seniors they are not going to get their social security checks when this is going on in his adminstration. Average home owners income here is $13,000.00 per year and each home cost the taxpayers of America $185,000.00 – Do you want four (4) more years of Barack and his “Change”?

  3. obama is an illeagle alain and should be deported back to africa

  4. Faith says:

    I am scared to death. I have 10 dollars to my name. I am 100 percent dependent on my Social Security and medical. If I do not receive my SS which I PAID into the system, I Am No free loader, just trying to survive. I have no family no plan B. I do not have any other program to fall back on. So that means my rent will not be paid, I will not get my medicine I desperately need, no food, I don’t even have a car to live in. So, I get evicted, get sicker without medicine, and suffer the repercussions of being off medicine without being under doctor care, and I starve to death on the street. I am a female and easy prey. So, Social Security is not an expense it is revenue that is want the government receives and has stolen from us. IOU are not acceptable. No one in the HOUSE SENATE or the PRESIDENT should get PAID. If they didn’t get paid well the debt ceiling would not be an issue. Washington give themselves pay raises without our approval. I have not seen our mere cost of living on my Social Security check for 2 years. I say there should be a revolution. I don’t think blaming only the president, but I do find it during the Bush crime family years debt ceiling was raised without question. We paid for 3 wars with no resolution, we bail out other countries, and China is waiting in the wings to own the Unite
    States. We will be a third world county. Oh and technically August 2 is the last date we can borrow money. We still have money up to August 10 to pay all our bills. Bills that is… again Social Security is NOT a Bill we have the money put another IOU in the box and pay us already. If you do not pay us, the you don’t collect Federal Taxes from August 2, 2011. You the government can’t collect if you do it’s fraud.

  5. Carolyn Watson says:

    The Govt. is marching to Marxist doctrine and turned on it’s people. It’s rotten from the top on down.
    All swore to uphold the Constitution and none have done it. They should all be tried for treason.
    Why doesn’t someone have the guts to print the truth about page 107 in Obama’s Health Care bill? You know- the word Dhimmitude. Google it and see what it is. It’s based on Sharia Law. ?Maybe Obama should be sent back to his homeland where they love this thing.
    The enemy is within and when the Socialist Part prints the names of 70 of their members that are Democrats, you get the message of what’s happening.

  6. Carolyn Watson says:

    I just printed a message, what happened to it?

  7. Pingback: Is Obama Willing to Cut Anything?

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