Paying for the Katrina Relief with Your Social Security Funds

Brad Plumer notes how the GOP wants to pay for the Katrina relief and not raises taxes now or in the future on wealth folks:

It’s an old business myth that the Chinese character for “crisis” combines the characters for “danger” and “opportunity.” It doesn’t. But I’m not sure anyone’s told the Bush administration, judging from this little tidbit in Congress Daily today: “[White House spokesman Trent] Duffy asserted that the vast spending that would be required to address the hurricane’s impact adds to the need to change Social Security, which threatens to strain the budget in coming years.” Ah yes, despite the fact that privatization that would add trillions to the deficit in the short term, at a time when Katrina will already add $100 billion or more to the deficit this year, the time for privatization is now, obviously, in the wake of disaster. Um, no.

Given that I’m constantly saying “there’s no free lunch”, I’ll admit that even a transitional increase in the General Fund deficit must either be offset by some spending cut or seen as another deferred tax bill. My simple point, however, is that the extra spending is part of the General Fund and not part of the Social Security Trust Fund accounting. So we have this choice – raise taxes in the future or slash Social Security benefits. Duffy seems to be saying the latter is the only option that the White House is considering.