Tag Archives: if debt ceiling isn’t raised

If the debt ceiling isn’t raised, there is no scenario where Feds would be paid

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AND YOU WOULD HOPE that means the House and Senate members wouldn’t get paid either — in fact, especially the House and Senate members. From the Federal Times:

The government could choose to pay interest on Treasury securities, Social Security, Medicare and Medicaid, unemployment insurance and defense contractors, BPC said. But that would leave no money to fund the Education, Labor, Justice and Energy departments, Federal Highway Administration, Environmental Protection Agency, the Small Business Administration, tax refunds and veterans programs.

Under another scenario laid out by the Bipartisan Policy Center, the government could try to protect the so-called social safety net by leaving defense contractors unpaid and instead spend on food stamps, housing assistance, veterans programs, special education grants and tuition assistance. But that would still leave large portions of the government — including the FBI, Interior, and Centers for Disease Control and Prevention — shuttered.

Federal salaries and benefits? Forget about it. In the center’s list of priorities, feds don’t come close to getting paid in either scenario.

This will be GREAT for our economy!

Related:

Boehner agrees with Obama: Social Security may not be paid if debt ceiling isn’t raised

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Think Progress reports on a Fox News interview John Boehner had with Palin’s biggest fan, Greta Van Susteren, on Friday night (via namelessgenxer):

Republicans have put forth the theory that Social Security is not subject to debt ceiling limitations because it is financed by payroll taxes. But it seems like Speaker of the House John Boehner (R-OH) agrees with Obama, and not his GOP colleagues, on this one. During an interview last night with Fox News’ Greta Van Susteren, Boehner agreed that if the debt ceiling isn’t raised, Social Security is one of the programs that is on the chopping block.

Money quote from Boehner:

“It all comes out of the general fund, and the general fund is expected to be out of cash come August 3rd or August 4th, and then the Treasury Secretary would have to make decisions on what to pay and what not to pay.”

In other words, retired teaparty voters shouldn’t assume SS / Medicare are on top of the general fund priority list when the world burns down.

Further, both Rep. Michele Bachmann (R-Mars) and Rep. Joe Walsh (R-IL) have accused President Obama of lying about Social Security checks. Walsh went even further and said “You know darn well that if Aug. 2, comes and goes there is plenty of money to pay off our debt and cover all Social Security obligations.”  This statement is what’s commonly referred to as ‘talking out of your ass.’

I think Walsh better take a look at the federal government’s budget for August: its incoming revenue as opposed to its outgoing obligations.

Of course there should be spending cuts, but incoming revenue is obviously WAY too low for the size / needs of our country. In case you weren’t aware (tea party voters), human population increases annually around the globe, even in the U.S. But let’s extend those tax cuts for the wealthy because one day soon they might decide not to bank the extra income and create a job instead!!

Attn teabaggers: here’s what happens if the debt ceiling is not raised

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Salon | What happens if the debt ceiling bomb explodes?:

In some quarters of the American political system, there are people — predominantly of the Tea Party Republican persuasion — who believe that Congress doesn’t need to raise the debt ceiling. If the U.S. government isn’t allowed to borrow any more money to pay its bills, runs their line of thinking, that’s fine and dandy. Finally, we’d be forced to tighten our belts and “live within our means!” Ignore the fearmongers predicting disaster — they’re just trying to scare markets and voters.

[...] Let’s start with the basic numbers. According to the Bipartisan Policy Center, the U.S. Treasury will have about $172.4 billion in revenue in August that can be applied to $306.7 billion in outstanding bills. If the U.S. Treasury is forbidden from borrowing any additional funds, it will therefore have to cut total August spending by about $134 billion, or 44 percent. …Click on over to this cool interactive widget at Bloomberg Government and decide for yourself who gets paid and who doesn’t if Congress fails to raise the debt ceiling.

Spreadsheet breakdown:

cont:

[...] Now, there are plenty of Tea Partyers who would no doubt be happy to get rid of the EPA, food stamps, unemployment benefits, Medicaid and any number of other government spending programs…

Since this is usually “all about me” when we’re talking teapartyers, and so many teapartyers are receiving Social Security and Medicare benefits, why shouldn’t the rest of us — the working people, the unemployed, the college students — all agree that Social Security / Medicare should be cut if the limit isn’t raised? Those two programs total $77.8 billion out of August’s budget — which is over 25% of all the money due. The majority of us don’t receive those benefits and we’re learning quickly that only two things should matter: ME and MINE as opposed to YOU and YOURS. In other words, boot straps.

…There are lots of different ways to divvy up government spending according to your personal priorities… if the U.S. government cut its spending [by 44%] for both August and September, GDP growth [c]ould drop by 2.3 percent from the previous quarter.

[...] Choose your poison: global market chaos, savage cuts to the social welfare safety net or recession. Or, heck, all of the above. …Slower economic growth means less tax revenue, which would force even more budget cuts. Laying off hundreds of thousands of federal employees would further boost the unemployment rate. And if the U.S. government ever did end up authorized to borrow money again, the yield it would likely have to offer to attract buyers for its damaged goods would undoubtedly skyrocket — putting further pressure on government finances.

Of course despite this alarming situation, those tax cuts for the wealthy are #1 on the list of important things for teapartyers and their corporate sponsors and their Republican leaders — Boehner, Cantor, Kyl and McConnell. This budgeting lesson should clearly illustrate how we’re all paying to provide the wealthy with their tax cuts. There’s no way the federal government obviously needs more revenue, right? We’ll just cut YOUR programs and services instead of mine.

UPDATE: