Social Security checks may not go out next week unless the debt ceiling is raised. This would affect 28 million Americans expecting payments on August 3 and another 27 million American seniors who expect their payments later in the month.
If Congress and the Obama administration think that they have received a lot of flak due to the way that they have handled the normally routine business of increasing the debt ceiling, just wait until 55 million Americans start protesting about not receiving their SS checks.
The seniors may not be as strong as they once were but can probably still muster enough strength to tear the White House and House of Representatives and Senate buildings apart brick by brick. If the government fails to pay Social Security payments those in government had best head for their secret secure underground bunkers.
President Obama has stoked these dangerous fires in trying to put pressure on the Republicans. According to Obama "if 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." President Obama made that statement in a televised address last Monday night.
Most SS recipients paid into the trust fund for years before retiring and reaching the age that qualified them for payments. Most thought that they were actually paying into a trust fund that held funds in their name.
Social Security Trust Fund Has been Raided For Years. Where is the Money?
Unfortunately, the United States government couldn't resist using that trust fund money to fund its endless wars, cover crazy government expenses, construct over 700 military bases around the world, and among other things bestowing generous benefits to Congress and members of the US government.
After years of raiding the SS trust fund to partially cover deficit spending and revenue shortfalls there isn't any money in the SS trust fund. Instead, it's stuffed with $2.6 trillion in IOUs. To repay the funds the Treasury Department would have to redeem and then issue a corresponding amount of Treasuries.
Here we are once again up against that pesky debt ceiling. The non-partisan Congressional Research Service backs up the administration's warnings that the Treasury Department may be unable to pay August SS payments unless the debt ceiling is increased. In a June report it states that Treasury needs to issue new debt to raise the cash to pay benefits. It may not be able to issue SS checks if the debt ceiling is hit.
"Social Security payments may be delayed or jeopardized if the Treasury does not have enough cash on hand to pay benefits," the report said.
So will you get your August SS check, and perhaps later checks on time? That is the number one question that millions of elderly Americans are asking just now. And no one in Washington seems willing to give them a definite answer.
Is this any way to run a country, especially one that bills itself as the greatest country in the world? To that question most Americans will reply with a resounding no. Especially the seniors who depend on SS checks for 90% or more of their income.
If SS checks do not go out on time there will be an immediate hit to an already weak economy. August benefits alone are expected to total $49.2 billion. Without those funds consumer demand for just about everything would plummet and almost certainly the economy would rollover into a double dip recession.
SS Relied on by Many Seniors