The measure would cut spending in Fiscal Year 2012 by $111 billion, cap future spending at 19.9 percent of gross domestic product and would allow for the debt ceiling to be increased if a balanced budget amendment is approved by Congress and sent to the states.
The White House continues to conflate the debt crisis with threats of Social Security insolvency, ignoring the fact that Social Security is a lender to our national debt, not a source of increased debt:
The administration lambasted the “Cut, Cap and Balance” proposal as setting out “a false and unacceptable choice between the federal government defaulting on its obligations now or, alternatively, passing a Balanced Budget Amendment that, in the years ahead, will likely leave the nation unable to meet its core commitment of ensuring dignity in retirement.” [emphasis added]
Social Security has sufficient funds to meet its obligations for the next 25 years based on the surplus in its so-called ‘lock box’ and on-going contributions from workers, according to the Trustees of Social Security and Medicare trust funds , without having to tap into the federal government’s general funds. I fail to see how “balancing the budget” or limiting the government’s ability to borrow money in the future impacts what is essentially a self-funded program independent of the general budget.
I contend it is this administration that is presenting the American citizen the “false and unacceptable choice” between defaulting on Social Security obligations or increasing the debt ceiling, and it seems Senator Harry Reid agrees with me (or vice-versa) on Social Security’s solvency:
Of course, he uses an older number that says it will be solvent for 40 years, soon after the above interview was taped the Trustees of Social Security and Medicare trust funds came out with a revised budget outlook that restated the solvency of Social Security to about 25 years.
Even the widely acclaimed factcheck.org basically supports the assertion that Social Security is self-sustaining for the next 25 years or so, but they insist that because the federal government has borrowed monies from the Social Security ‘lock box’ and that it will have to borrow money to repay the interest and principal on those loans, that Social Security contributes to the deficit. Factcheck.org is wrong – blame for interest payments belongs to the borrower, not the lender.
socialsecurity.gov: Trustees Report Summary –
Status of the Social Security and Medicare Programs
factcheck.org: Democrats Deny Social Security’s Red Ink