Nancy will never need Social Security. Nor will the President.

what happens behind these close doors. The press spinned it also. The offer on Social Security came from Boehner and apparently Obama accepted it. Boehner also offered to raise the age of Medicare and Obama rejected it. So apparently Boehner got specific on what he wanted to cut. The only thing Boehner has done, is accept rates going up on incomes of one million dollars.

apparently she lied.

Going off the cliff would be preferable to this - at least Social Security and Medicare are excluded and there would be cuts to the defense budget.

zip, nada, zilch, etc....

Joe Biden would pick up those cans.

the Iraq war went in the red immediately. Collect for the wars to reduce the deficit. Raise fuckin taxes until we repay our children for the stupid wars that we are all guilty for allowing to occur. Dont dare even speak of SS.

In reality the general fund pays the SS Trust Fund interest.

So technically you are wrong.

trust fund. Saying the General Fund pays part of Social Security is the same as saying it pays for my light bill because I'm invested in treasuries.

That comes from the general fund just as China's coupon does.

Your light bill analogy is fine.

I am looking at it from a comprehensive inter-government perspective. The key is that the Treasuries are special issued discretely to the SS Trust Fund and are not available on the open T market.

Let's image that we cut SS benefits so sharply that the trust fund had indefinite surpluses. The trust fund would start growing and would continue to grow forever. But ....

the general fund would still legally owe principal and interest on those notes to the trust fund. Those amounts would still have to be paid, regardless of the funding level within the system. To simply wipe that debt away would be an unconstitutional violation of contract law (as well as theft from the American workers).

So since that interest is due to the trust fund, regardless, cutting benefits does nothing to reduce the general fund deficit.

$30 trillion surplus.

Which would mean the General Fund had a $30 trillion cash deficit (With future interest accrued). That would choke the rest of us to death - the CDC, HUD, FDA, all operations, etc.

Otherwise, the huge SS surplus would just sit there, presumably invested in other assets or cash. (Because there wouldn't be enough treasuries to buy) The general fund wouldn't have to be affected at all. (Of course, it would be a stupid waste to build such a huge SS surplus, but I find extreme cases like that to be very instructive when discussing such matters)

The two funds are separate for a reason, and tinkering with one does nothing to directly help or harm the other.

Just as an aside: I think they are planning on applying the Chained CPI to our tax brackets as well. We will have tax bracket creep again, and lots of other sneaky little ways of picking our pockets over time.

by force of law and the Treasury must borrow to fund operations. The SS Trust Fund can legally buy nothing else.

And the circular dragon goes on and on since the Treasury MUST issue debt to feed the SS Trust Fund.

Your argument has weakened considerably in the last 15 minutes. Remember that although two sets of books exist consolidation must occur in the end.

Therefore the SS trust fund would have to either invest in something else (change the law), accumulate cash, or (heh, heh) increase benefits so as to reduce the surplus. It could never *force* the general fund to issue new treasuries.

The point is that reducing Social Security benefits doesn't help the general fund at all. Everything else is just ridiculous academic speculation about a world with a $30 trillion SS surplus. (Which I enjoy, but it has no relevance to the real world or our current dilemma.)

and net new Treasuries were issued then.

http://www.ssa.gov/OACT/ProgData/fyOps.html (see right hand column).

Also http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

The reason why is that SS excess funds collected MUST buy Treasuries. We collected excess FICA in those years. So therefore NET Treasuries issued increased even during a surplus. And then the general fund increased -- albeit for only two years.

I specifically used the word "net" for a reason. Even when there is a general fund surplus, new treasuries will still be issued each year as old ones mature. If the general budget is balanced, total outstanding treasuries do not increase. (No "net" new treasuries) But old ones do mature, and new ones are issued to replace them and refinance that portion of the debt.

In times of general fund surplus, it is still possible to issue new treasuries to the SS fund. As privately-held treasuries mature, the general fund simply refinances with the SS fund rather than going back to issue new treasuries to the private sector at auction. There are no net new treasuries under this scenario, just more held by SS and less held by the public.

Then other Treasuries were retired to obtain a reduction in National debt, right?

I really need an editor!

It is how it works. We rightly earn interest on *our* $2.7 T.

Just the same as if you buy treasury bonds and maintain separate books. Just like China keeps a separate book.

I guess I'm saying so the fuck what?

You only care about the SS Trust Fund. I care about it and the general fund.

And there is a third set of books - the Federal Reserve. The Fed owned $1.6 trillion of US debt at last audit. The US Treasury is the peoples bank account.

Because I'm pretty much a voice crying alone in the wilderness. Our political and pundit classes are largely innumerate. They form their opinions based on who they trust, and this administration still trusts people like Jeff Immelt and Tim Geithner.

It's just an offering to the god of bipartisanship which the president worships. What else could it be? As you posted its not effective deficit reduction.

And why would the president and other 'democrats' go along with it?? If social security cuts don't do anything to shrink the deficit....why are they not being called out on in?

If this deal goes down, which it still may not, the general public isn't going to perceive this as being something the Republicans fought tooth and nail to get. They are just going to perceive that the Democrats sold them out.

Hell, the Republicans will probably run against us for cutting Social Security. They'll say we spent the money on welfare and food stamps instead.

haven't been shouting this from the rooftops. Every time a repub brings up cutting social security to cure the deficit ... democrats need to answer with "why do you want to cut social security since it has nothing to do with the deficit".

there are 250 millionaires in Congress. It is easier to cut yours than theirs. Boehner is worth four million dollars and Cantor five. Obama is worth seven and Pelosi is worth millions. The people doing the negotiations are the top percent.

will the chained CPI extend the solvency of SS? From 20 years to 25 years for instance?

Projections based on 25 years from now are notoriously inaccurate, and the trustee is required to use some pretty conservative assumptions in making the projections.

But regardless of that, I have never found the idea of cutting benefits now because we *might* have to cut them later to be a compelling one.

is a better approach as well if long term solvency is the objective.

I've always thought that should be the first change made, if indeed a change proved necessary.

People on fixed incomes with out nest eggs spend it all.

If it's something they want why would you expect it to be a good idea?!

C'mon now, use your heads people.

This one is unacceptable.

We've already offered billions in spending cuts. That's enough "stupid" for now. No need to compound the stupid by cutting our already-shabby safety net and soiling our political brand in the process.

is taking food off the kitchen table for many. Sickening.

The deficit and our budget.

instead of looking to do more harm to our elders, our vets, and our poor. Fuck these money grubbing rich fucks.

I oppose any reductions in benefits or eligibility, but men and women of good faith could still find other ways of reducing expenditures by many, many billions of dollars.

No one wants to talk about it, but we really need to take a long hard look at end-of-life expenses. And something must be done to discourage (or at least stop encouraging) excessive testing. People are right to fear lawsuits, but they often take their fears to irrational heights. I suspect many tests and consults are ordered primarily with liability considerations in mind. (And with little or no expectations of the tests yielding additional useful information)

It's out of control.

Defense spending is already projected to decrease...thank goodness.

to kick your own thread?