shutdown

[SK in CV]

So without any legal basis, China gets paid before SS and other federal pension recipients?

[FlyerInHi]

Federal employees are working now without pay during the shutdown. Sure the pain will spread to pensioners, and on and on, if the debt ceiling is not raised.

Stretching the boundaries of the law is very interesting. The take no prisoner approach is a dangerous path to travel on. But the tea party has chosen it. Sen mc Cain and Ayotte were clearly worried today on TV. Ayotte looked shaken.

If the debt limit is not raised, do you think the president will issue presidential bonds? Or will he prioritize the best he can? It will be messy to be sure.

[livinincali]

[quote=SK in CV]So without any legal basis, China gets paid before SS and other federal pension recipients?[/quote]

Social security is the easiest one to cut from a legal perspective. Your social security statement says social security can be changed with an act of congress.

Work already performed probably has legal standing as a debt, but I think they can probably pay that as well. They can also say cease and desist all future work and if that order wasn’t obeyed then obviously they could withhold payment.

[SK in CV]

[quote=livinincali][quote=SK in CV]So without any legal basis, China gets paid before SS and other federal pension recipients?[/quote]

Social security is the easiest one to cut from a legal perspective. Your social security statement says social security can be changed with an act of congress.

Work already performed probably has legal standing as a debt, but I think they can probably pay that as well. They can also say cease and desist all future work and if that order wasn’t obeyed then obviously they could withhold payment.[/quote]

Who is going to vote to cut SS benefits?

[FlyerInHi]

[quote=SK in CV]
Who is going to vote to cut SS benefits?[/quote]

Well, Republicans want to. But they are afraid to propose specific cuts to social security, Medicare and Medicaid. They say they want to negotiate, but they want Democrats to lay out the cuts.

[livinincali]

[quote=SK in CV][quote=livinincali][quote=SK in CV]So without any legal basis, China gets paid before SS and other federal pension recipients?[/quote]

Social security is the easiest one to cut from a legal perspective. Your social security statement says social security can be changed with an act of congress.

Work already performed probably has legal standing as a debt, but I think they can probably pay that as well. They can also say cease and desist all future work and if that order wasn’t obeyed then obviously they could withhold payment.[/quote]

Who is going to vote to cut SS benefits?[/quote]

I don’t think they’ll vote to cut SS benefits but it’s possible a court would rule that when congress shut down government and refused to raise the debt ceiling it was an act of congress. Therefore SS benefits can be cut if the treasury chooses to go down that path and it’s the easiest path from a legal perspective. There’s already some wording in the SS benefit law that demands cuts when the trust fund runs out, maybe you can make a legal argument that the trust fund already did run out as it’s nothing more than non marketable IOUs.

I’m not saying the government will do that but I am saying that when push comes to shove SS and other welfare benefits probably have the lowest standing in terms of have to be paid. Congress defunding those programs does not constitute a breach of contract in my eyes. We didn’t vote to end social security but we didn’t allocate any money to pay for it.

[SK in CV]

[quote=livinincali]I’m not saying the government will do that but I am saying that when push comes to shove SS and other welfare benefits probably have the lowest standing in terms of have to be paid. Congress defunding those programs does not constitute a breach of contract in my eyes. We didn’t vote to end social security but we didn’t allocate any money to pay for it.[/quote]

SS benefits and other welfare benefits are not the same. SS benefits are specifically addressed in the 14th amendment as are other federal pension programs. SNAP and WIC payments could stop. SS and other federal pensions can’t without violating the law. It is the exact same violation as not paying interest on notes and bonds or not paying treasury bills when due.

I don’t think there is any logic whatsoever in arguing that the courts would see inaction by congress as a congressional act. Social Security, until changed, doesn’t need periodic appropriations. The trust fund is solvent, possibly even if interest payments stop. The way it’s funded is a permanent appropriation.

[FlyerInHi]

[quote=SK in CV]The trust fund is solvent, possibly even if interest payments stop. The way it’s funded is a permanent appropriation.[/quote]

That’s a good point. The SS trust is currently solvent so legally benefits would have to be paid. Plenty of parties will be harmed and they will sue.

Let’s see what happens after Oct 17. It will be interesting if the debt ceiling is not raised, at least for a couple weeks past the deadline.

[livinincali]

[quote=SK in CV]
SS benefits and other welfare benefits are not the same. SS benefits are specifically addressed in the 14th amendment as are other federal pension programs. SNAP and WIC payments could stop. SS and other federal pensions can’t without violating the law. It is the exact same violation as not paying interest on notes and bonds or not paying treasury bills when due.

I don’t think there is any logic whatsoever in arguing that the courts would see inaction by congress as a congressional act. Social Security, until changed, doesn’t need periodic appropriations. The trust fund is solvent, possibly even if interest payments stop. The way it’s funded is a permanent appropriation.[/quote]

The first burden of proof would be is social security protected by section 4 of the 14th amendment. Social security was created after the 14th amendment and I’m not aware of any SC ruling that specifically states the current SS law is guaranteed under that section. Maybe there is something in the Nelson ruling that states the courts used the second part of section 4 to arrive at that ruling. SS is protected but in this particular case the plaintiff was disqualified by the rebellion clause. It also possible they didn’t bother with the establishing the burden of proof that SS was protected because the rebellion clause applied anyways so that question didn’t need to be answered. That would be more typical of a supreme court ruling. They don’t usually bother establishing anything beyond the bare minimum.

Of course this is probably moot because congress is going to do something. It would be interesting to see what treasury actually would do if things don’t get resolved. Would they break the debt ceiling using section 4 as justification. Would they bend the rues by issuing high yield bonds with nominal face values. Would they try the trillion dollar coin idea although that also seems to be against a different congress law. Would they prioritize payment or would they actually call the bluff and default on existing debt.

[Author]

Posts