Just cash in a few Social Security Trust Fund bonds
Speaking about Social Security, President Barack Obama told CBS news today that “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.” The issue he refers to is raising the federal debt ceiling.
That’s a very curious statement for the president to make. Because liberals, he included, refer to the $2.6 trillion Social Security Trust Fund as money socked away, available to pay benefits for a long time.
So couldn’t the president simply cash in a few of the bonds held by the trust fund to pay benefits in August?
The answer is: Of course he can’t do that. The money represented by those bonds in the trust fund has already been spent. The only way for government agencies to pay them back is through some source of income of their own such as taxes or fees, more debt (which the debt ceiling would prevent), or providing fewer services.