I found myself in a state of utter befuddlement as I took in the words exiting our Commander and Chief’s mouth during his address to the nation. While just as wrong, it is one thing for politicians to dance the verbal dance they always do (ie. to selectively skirt words, take Reagan quotes out of context (stay tuned for that one!), and color a conversation to best fit one’s political needs, etc.); it is pretty bold to flat-out lie.
Recently, the President said the following: “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,” (CBS News.)
Tonight, he revisited the issue:
“Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach.
If that happens, and we default, 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.”
Mr. President, that is a lie.
Forgive any disrespect, but there is no other way to put it.
If in fact I am wrong and the President is correct, I would dearly love to know where the 2.4 trillion dollar trust fund in U.S. Treasury Bonds, money “which its trustees are legally entitled to redeem whenever Social Security is running a current account deficit” (Michael McConnell) is going to go on August 2nd.
Additionally, even if this multi-trillion dollar safety net did not exist, the U.S. government still takes in enough revenue (to the tune of close to 200 billion dollars a month) on a monthly basis to cover our basic obligations such as servicing the debt, Social Security payments, military pay, etc.
Bottom Line: Our revenue is not disappearing on August 2nd.
Let’s break this down. According to a simplified budget chart put out by the White House and published at the Washington Post (click here for full article), the United States spends the following per year on the various mandatory obligations the President said we wouldn’t have enough “money in the coffers” to cover, (the two “biggies” being our Debt, and Social Security) come August 2nd :
Interest on the Debt: 251 billion
Social Security: 730 billion
Medicare: 491 billion
Medicaid: 297 billion
Breaking that down roughly, by month:
Interest on the Debt: 20.9 billion
Social Security: 60.8 billion
Medicare: 40.9 billion
Medicaid: 24.8 billion
That’s roughly 147 billion per month. Now, take into consideration the Social Security Trust Fund in place (2.4 trillion); now we’re down to 86.2 billion per month. Just for kicks, let’s factor in Defense at 895 billion. That’s roughly 75 billion a month. Now, we’re at 161 billion. Again, remember that we take in close to 200 billion a month. So, I’m at a loss- how is it exactly that we are not going to be able to cover our most basic obligations?
This chart takes approximately the almost 100 page federal budget and condenses it; it would indeed interesting to see what the 520 billion in “other discretionary spending,” and 612 billion in “other mandatory spending” represents. No doubt programs the President will choose to fund over the aforementioned obligations in light of the pending budget deadline.
The question remains, therefore- if not used to pay for our basic obligations, what will it be used to pay? Furthermore, as we do continue to possess sufficient monthly federal revenue to service our debt, how exactly is it that we will, as the president put it, experience our “first ever default?” Is default not a failure to pay? How can one fail to pay if one has the money, unless one simply does not write the check?
Listen closely- if, post August 2nd, our debt payments do not go out; if our Social Security payments do not go out; if our military pay does not go out; it will not be for lack of funds. It will be because this President purposely stopped these payments. Any failure to make payments on our debt, which would result in a default and a downgrade in our national credit rating rests on his shoulders as well.
Write the White House. Write your Representatives in Congress. The American people are entitled to see exactly where OUR near-200 billion a month is going, if not to our obligations. After all, wasn’t this going to be the most transparent administration in history?