Two days ago President Obama noted that if Congress failed to raise the debt ceiling, he would not be able to guarantee full Social Security benefits to all eligible seniors. Subsequently the right-wing media has jumped on this statement of reality, claiming that Obama was issuing a “threat” to seniors. But conservative coverage of Obama's remarks didn't truly reach its nadir until yesterday, when Jim Hoft weighed in.
Hoft, parroting a press release from Republican Rep. Tim Huelskamp (KS), claimed that “Obama was just playing games with seniors.” His evidence was video of an exchange between Huelskamp and the Social Security administration's Chief Actuary Stephen Goss. In the video Goss says that the Treasury Department, not the Social Security administration, is in charge of dispersing funds.
I don't speak Hoft, so I'm not sure how you get from there to arguing that the president is “threatening” Grandma. In fact, Goss' simple factual observation is entirely compatible with the president's simple factual observation. Treasury may have final authority over Social Security payments, but if the debt ceiling doesn't go up, they will have to weigh their obligation to senior citizens against a massive amount of other debts and obligations. Something will have to go, and by not making any firm promises Obama was only being prudent.
Here is Jerome Powell, a former Treasury official from the first Bush administration, making basically the same point in the pages of Politico:
The United States has never prioritized or failed to pay any obligation when due during a debt limit impasse. Despite the institutional risks and the lack of clear legal authority, we assume that Treasury will attempt to prioritize payments in a last-ditch effort to avoid default.
Federal Government Operations: For Aug. 3-31, 2011, we project inflows of $172 billion and bills due of $306 billion -- a shortfall of $134 billion. As an illustration, Treasury would exhaust all inflows just by paying six major items: interest, Medicare, Medicaid, Social Security, unemployment insurance and defense vendors. Without cutting from these six, there would be no money for entire departments such as Justice, Labor and Commerce among many others, or for veterans' benefits, IRS refunds, military active duty pay, federal salaries and benefits, special education, Pell Grants for college students or food and rent payments for the poor. An overnight 44 percent cut in spending would slash many popular and essential programs.
Indeed, even Karl Rove acknowledged today that the United States won't be able to fully pay for Medicare, Medicaid, Social Security, Defense Department vendors, active-duty members of the military, IRS refunds, and unemployment benefits.
But Hoft and others in the right-wing media are desperate to downplay the catastrophic consequences of failing to raise the debt ceiling, and blame what consequences there are on Obama. And they appear willing to twist statements and ignore facts to do so.