A Project of The Annenberg Public Policy Center

FactCheck Mailbag, Week of July 26 – Aug. 1


This week, readers sent us comments about the debt limit debate.

In the FactCheck Mailbag, we feature some of the e-mail we receive. Readers can send comments to editor@factcheck.org. Letters may be edited for length.

Social Security Surplus?

In the article "Debt Limit Debate Round-Up" [July 29], you state that "Social Security benefits paid were more than payroll taxes in 2010, leading to a cash deficit of $49 billion."

I was under the impression that Social Security payments came from the Social Security fund, not from federal tax receipts. In fact, FICA payments fund Social Security, and the federal government has simply borrowed from those FICA taxes.

If there is a deficit in Social Security receipts, the government doesn't have to make up the difference using other tax receipts. Social Security has a surplus of cash.

So isn't it a little misleading to imply that Social Security is in part to blame for the deficit?

Melvin J. Briggs
Pensacola, Fla.

 

In today's Debt Debate article, the following statement is made: "We take no position on whether Social Security should be cut, but it's wrong to say it's not contributing to the deficit. Social Security benefits paid were more than payroll taxes in 2010, leading to a cash deficit of $49 billion."

This ignores a major fact, that Social Security has taken in about 2.5 trillion dollars, which is owed to the SS Fund by the Treasury.

So if SS has a 49 billion deficit, it has a 50 times that amount owed. So to say that it has contributed to the national debt or deficit is false; in fact, the opposite is true: It has contributed to keeping the external debt smaller.

SS does not add to the deficit because it can make up any shortfalls (like the 49 billion) by calling in a small percent of what is owed to it. If the Treasury must borrow money to repay Social Security, that deficit spending is of the Treasury, not Social Security.

To say, as the article implies, that despite a 2.5 trillion surplus, that a one yr 49 billion shortfall adds to the debt and deficit? That is not a fact. Ignoring the surplus is leaving out a huge fact.

A deficit is created when an institution (or person) spends beyond what it has: Social Security has 2.5 trillion in bonds, and it can handle decades of deficits with that surplus. Hopefully, some small adjustments (as in the cap) can be made to keep it solvent far beyond that.

Dale Ruff
Felton, Calif.

FactCheck.org responds: It's true that FICA funds have been used for other purposes in the past, effectively reducing the size of past deficits. But Social Security does not have a "surplus of cash," as our first reader supposes. The system's trust funds are made up of non-marketable government securities, which are obligations to be paid by future taxpayers. For a full discussion, see our Feb. 25 article, "Democrats Deny Social Security's Red Ink," and our subsequent response to readers on this topic.

 

'Blank Check' Bunk

I believe that you miss the point with your fact-checking John Boehner’s statement that the President wants a “blank check” in your article titled "FactChecking Dueling Debt Speeches" [July 26]. Raising the debt ceiling does NOT provide a SINGLE EXTRA DOLLAR for spending; the budget was already created by Congress and signed by the President. This is about paying existing government issued bonds and issuing new bonds, and is not part of the normal budgetary process.

Michael Harrison
Oakland, Calif.

 

Great article "Fiscal FactCheck" [July 15].

My comment concerns the article "FactChecking Dueling Debt Speeches." Specifically, I find Boehner's "blank check" comment puzzling. Normally, the phrase refers to authorizing someone to purchase anything they want or to spend any amount they want. But that doesn't really apply to the debt ceiling, which has nothing to do with allowing Obama or anyone else to purchase anything they want or to spend any amount they want. It simply raises the limit on the debt to allow the country to pay for spending already determined by the current budget.

I don't remember anyone using the phrase to refer to the previous debt ceiling increases, all of which were "clean" bills. I think Boehner's use of the phrase was misleading, and is particularly confusing to the public who already lack an understanding of the distinction between the debt ceiling and the budget. The time to discuss spending is before you actually do the spending.  The debt ceiling is more analogous to deciding whether or not to pay the bill once you've already bought something on credit. I don't think paying your bills without deciding whether or not to spend more in the future would be considered a "blank check" to most people.

Brian Kaplan
Indianapolis, Ind.

 

You discuss Speaker Boehner's claim that the President "wanted a blank check." As far as it went, your response is good, but you neglected to respond to Boehner's use of the term "black check."

My dictionary defines "blank check" as "permission to use an unlimited amount of money."  Especially to people not familiar with the internal workings of the Government, Speaker Boehner's use of the term "blank check" appears to imply that President Obama seeks the authority to spend a large amount of money without any restrictions. That is totally false.

Article I, section 9, paragraph 6 of the US Constitution states: "No money shall be drawn from the treasury, but in consequence of appropriations made by law; . . . ."

The President cannot spend one dime unless the Congress has passed an appropriations act, and then can only spend the amounts appropriated for the specific purpose for which the funds are appropriated. Raising the debt ceiling merely would allow the Government to borrow sufficient funds to make up the difference between moneys spent under existing laws and within the limits contained in appropriations acts, and the amounts collected by the Treasury in taxes, fees, and charges authorized by law.

The debt ceiling increase would not grant President Obama any additional spending authority, let alone authority top spend unlimited sums, as the term "blank check" strongly infers.

Henry Cohn
Gaithersburg, Md.

FactCheck.org responds: We did address the "blank check" talking point again in a subsequent article, "Debt Limit Debate Round-Up," on July 29. We, too, said we were "a little perplexed" by this claim.

 

Finger-Pointing

Under “Who's to Blame for 'Crisis'?” the article concludes that both parties are partly responsible. This is completely FALSE. Raising the debt ceiling does not require any spending cuts. The debt ceiling could be raised with no conditions whatsoever on a straight vote. The Republicans made spending cuts a condition for raising the debt ceiling so they alone are responsible for this crisis.

Craig C.B. Knauer
Swarthmore, Pa.