On budget, off budget
op-ed by Dale Coberly
Is It or Isn’t It
(And what is a “budget” anyway)
There have been a number of comments and counter-comments on the subject of the definition of “on budget.”
I may have contributed to this “debate” by referring to Social Security as “off budget.” I knew what I meant, and I thought I was using the words the way I had seen them used by “experts.” Then CoRev and MG found “definitions” that seemed to contradict my usage. It has seemed to me that these commenters didn’t really understand the definitions they were citing, but I think we both have been guilty of a kind of laziness and stubbornness that make it impossible to resolve the dispute.
I do not offer the following out of any claim to authority, but as an appeal to common sense.
(Dan here…Spirited debate warning…feint of heart need not enter. OTOH, stay on topic and try not to be repetitious.)
Words don’t “mean” anything. They point the way to shared ideas. Just as a picture of a horse is not a horse, nevertheless the picture can remind anyone who sees it of their own experiences with real horses, or movie horses, or story horses. Words are the same way, they point us to experiences we might, or might not, share with the person we are trying to communicate with. But sometimes the experiences are not so well shared as we thought.
There are two concepts here that need clarifying. “Social Security” and “budget.”
The first is the legal, historical, practical, and moral status of Social Security.
Even before looking at that, it needs to be understood that Congress can change the legal status of anything at any time. [Subject only to the Constitution. But the Supreme Court can change the Constitutional Status of anything at any time subject only to what it thinks the people will put up with before they lose faith that the law means anything at all — other than the whim of the current resident.]
We know that. We do not argue that Social Security IS, and always will be, X. We argue that it was created as X, has always operated as X, and we think it should continue to operate as X. X in this case is that Social Security is funded by a special tax dedicated to pay for the retirement and insurance benefits of the taxpayer himself according to a formula based on his own direct contributions.
“Tax” is another word we need to be careful about: The SS tax is actually an insurance contribution. It is also a tax in that it is a non voluntary payment collected by a government, but it doesn’t act like a tax. It acts like an enforced savings “deposit,” which is dedicated to a fund which will be used to provide the taxpayer with essentially his own money (plus interest) back under certain well defined and all but certain conditions. Social Security taxes are legally separate from those taxes which are collected for the usual purposes of government, and they are accounted for separately. They may be LENT to the government, quite formally, with an obligation of the government to repay the loan with interest. But they are not “fungible” or so mixed with government funds that they lose their identity. They always carry a “tag” telling everyone where they came from and where they must return to.
“Budget” is the other term we need to clarify. We ought to have learned from ENRON and Arthur Anderson that accounting can be used to conceal facts as well as to provide an honest record of where money comes from, and how it is owed, and to whom. A budget is created by an entity for its own purposes and does not necessarily reflect a larger reality. Thus, if you are operating an agency of the government, and you have always been able to count on money borrowed from Social Security to pay for part of your activities, you might just enter that money on your books as revenue. And if you have no expectation, or responsibility, to repay it, you might leave it at that.
But if you do have a responsibility to repay it, and you don’t properly account for that, a time will come when you are ‘surprised’ to learn that there is a call on the money you have spent and you are unprepared to repay. There may be an honest reason to keep books this way, or prepare a “budget” this way, but unless your purpose is dishonest… you wish to deceive or confuse your creditors, or auditors, you really need to enter the borrowed money on your books as borrowed money. that is, as a debt that you owe.
This is the case with Social Security. The government knows and legally acts as if it owes TO Social Security the money it has borrowed FROM Social Security. Whether or not it always notes that on any given “budget” does not change the legal… and moral… obligation.
My own feeling is that the decision to keep Social Security debt “off the books,” and to write the various “briefs” that we have seen quoted by CoRev and MG was a decision made more for the purpose of confusing the public… and the press… than for any good or honest reason… even that of convenience.
Sometimes they give themselves away, as when the author of a certain CBO “brief” attempted to convince us that Social Security was no different from any other tax because the money went into the Treasury just like other taxes. This would be like a bank telling you that your money was no different from Joe Smith’s because the same Teller took it in… and therefore the Bank can give it to Joe Smith if it wants, instead of to you.
Honest people can resolve these semantic confusions in a few minutes. When it’s harder than that you can suspect that at least one of the parties is not being honest. Try to look behind the word at the reality it is pointing at.
CoRev
I am not sure why you should call me ignorant and then explain in detail what i had just said in brief.
Unless of course your purpose is to obscure the point.
But just between you and me, the lowest level government office has a “budget,” for which it is accountable.
Darn
in all those words i missed the punch line. at the very end CoRev comes back to his assumption that the only way to pay back the money the government borrowed from SS is to borrow from the public thus increasing the “actual” deficit.
More bull shit. The government could go out and get a job and pay its bills with real money. In any case borrowing from the public to repay a loan from the TF does not increase the deficit.
Unless you are claiming that the money owed to the TF is not “really” owed. Which is dishonest, as well as immoral, as well as contrary to law, as well as contrary to the actual facts.
Dale, you are clearly having problems. What is this supposed to mean in real world terms? “The government could go out and get a job…”
CoREv
in real world terms it means that the government gets money from taxes.
“get a job” is a figure of speech in this context. i am making a comparison between the government and your lazy brother in law who “has to borrow” the money to repay the money he borrowed. the brother in law could get a job. the government could pay its debt with non-borrowed money.
but it would almost certainly have to raise the taxes of the people whose taxes it cut to create the deficit when it bought stuff that it paid for with borrowed money… some of it borrowed from the SSTF.
as to who is having problems
i can tell the difference between a borrower and a lender. can you?
so far your purpose here is to obscure the fact that Social Security does not contribute to the deficit.. except of course in the sense that if you borrow money from you mother, it’s her fault that you are in debt.
and your other purpose here seems to be to get away with cute little cheap shots.. the sort of thing you would call ad hominem if they were directed at you, and cry bitter tears and hold up your injured paw and say how mean they are to me.
juan
or we could call it “forced insurance.” i compare it to mandatory car insurance which i hated when it was first applied to me. after all, i said, i am a good driver; why should i pay for the accidents of the bad drivers.” no one took me too seriously. they had heard that before from lots of people who weren’t as good drivers as they thought.
thing about Social Security is all the young pups who “aren’t going to need it” because they are never going to get old. and when they do they are going to be rich. and they are going to have jobs they love and never want to retire.
and since there are some people who do get rich and some people who do have jobs they don’t want to retire from… those young pups always have someone to point to. someone much nicer to identify with than some poor old loser eking by on her social security check.
nonetheless, i don’t want to have to step over the bodies of all those one time future millionaires when they are sleeping in doorways after their sure thing didn’t pan out.
“Thus, if you are operating an agency of the government, and you have always been able to count on money borrowed from Social Security to pay for part of your activities, you might just enter that money on your books as revenue.”
I am not the only one to mention this, but for any Federal agency, except for the Treasury, perhaps, to identify its ultimate source of funds would be a royal and unnecessary pain in the ass. Why should they even know where it comes from?
BTW, where is a definition of the Federal budget? You mean that no gov’t agency, such as the CBO, bothers to define it?
coberly: “in real world terms it means that the government gets money from taxes.”
The gov’t is the ultimate source of its money.
coberly: “ The government could go out and get a job and pay its bills with real money.”
😉 😉 😉
Are the bonds held by SS AAA? Sure they are. But to pay them off in the “new” reality will kill the broader economy. So it won’t be allowed to happen.
SS has been hit hard. The 08 recession took 8mm contributors off the books. They have not returned. The 09 COLA increase was an anomoly, but it base lined expenses by 9% in just one year. We know that DI is way off track. The economy is forcing more and more people to enter the system early.
What was supposed to be happening in 2016 actually happened in 2010.
None of this is the fault of SS. But that does not change the results. The savings that SS was going to put away are now not going to happen. So there is a shortfall.The lines crossed before we could reach the “Greenspan Goal”.
As discussed here there are many approaches. Given that the problem is in the 2-20 year time frame (not something 75 years away) a solution should be crafted to address that reality. Somewheres around 3030 the TF will be equal to one years payment. It will have to be paygo after that.
You folks have to come up with a plan(s) that address the new reality. Ideas that push the cost far into the future will not work this time.
Min
as an example of good faith “arguing” i would say that i should not have implied that every agency knows where its money ultimately comes from. But when the CBO publishes a ‘brief” that pretends it doesn’t know that the government owed the SSTF a legal debt, i’d say someone is practicing ENRON accounting.
I was hoping to make the point that “definition” does not address the question of “what is actually happening here?” legally, historically, really, and morally.
bkrasting
never learns. after all this time, there you go again.
SS is owed a debt. the debt can be paid.
SS could write off the debt and just pay future benefits out of its own dedicated tax… with a small tax raise that no one would notice.
Krasting is one of those who wants to obscure these points to provide cover for those who want to kill the workers’ right to protect their own savings from inflation and… dare i say it?…bond traders.
Krasting wants to pay for “the deficit” which has nothing to do with Social Security.. by taking away the retirement savings of the people who trusted the full faith and credit of the United States of America.
btw
we HAVE come up with a plan that addresses the “new reality.” Bruce Webb calls it the Northwest Plan.
raise the payroll tax one tenth of one percent whenever the Trustees report short term actuarial insolvency. Looks like first installment would be due about 2026… gets a little jump on “The Death of the Trust Fund” ™ and it’s all pay as you go from there.
but krasting doesn’t bother to learn or understand any of this. he just keeps on repeating his mantra: ” oh. big deficits. need to cut Social Security.”
coberly,
You are hedging around introducing your interlocutors to epistemology.
You should start by differentiating belief from knowledge.
The overlap of belief and truth is knowledge.
I was going to throw around some figures from GAO and some budget analysis available at GPO but I decided the issue is epistemolgy.
Sometimes you cannot alter beliefs.
BK
The government through the Treasury Dept has been using excess FICA revenues to supplement the general tax revenues that support government spending through the general budget. Like all businesses the government identifies its different accounts and sources of funds. That additional revenue that originates as excess FICA revenue is accounted for with the concept of Special Treasury notes. You know this very well. It may very well be true that Treasury notes represent a debt and that the interest on those notes adds to the government’s budget costs. That’s the way borrowing works. Do you hold any 10, 20, or 30 yr T-Bills? The interest on those notes also adds to the government’s budget costs. Why would one type of Treasury note be seen as more odious, if odious is one’s perception of debt service, than any other form of Treasury note?
Any deficiency of the budget can be easily reduced by two proven methods. Forgive my redundency. I have made this statement many times now over the past week or two on other threads discussing this same issue, government debt. The government can restore upper marginal tax rates to their historical levels of 45%, 50%, 60%, or even 90%. The top marginal rate has been even higher. No one died as a result. It’s not like a pandemic or, to be more topical, a tsunami following an earth quake. It’s the waay governemtn is suposed to pay its expenses, the expenses of providing its citizens with services.
And the provision of government services brings me to the second method of deficit reduction. Look to the biggest part of the discretionary parts of the budget. War in the middle east and general military excess. Include special tax breaks to corporations like mega farms and natural resource extractors. There’s no shortage of money in our economy. There is a shortage of political will coupled with a venal inclination to give to the rich and take from the poor. Don’t blame Democrats or Republicans. It has nothing to do with political affilliation. It has everything to do with an oligargic structure that has been developing in our country during the past fifty years. I should really say growing larger and more bold over the past fifty years, as it has always been present though better contained. But I digress.
That’s the way to cope with the budget, on or off. Be a patriot and pay your taxes and write to your government reps and tell themn to stop pandering to corporate America and its extraordinarily wealthy leadership.
“The 08 recession took 8mm contributors off the books. They have not returned.”
However, now those contributors who were expected to retire in the next 5 years will not do so because they have already retired. You should expect the rate at which costs increase to be lower than was previously projected.
“The 09 COLA …” has nothing to do with SS. It did not increase future costs. It did not come from SS funds. It was a poorly understood stimulus.
“Somewheres around 3030 the TF will be equal to one years payment.” I assume you mean 2030. We generally use the Intermediate Cost forecast from the latest report when possible. In that case you want 2033.
“You folks have to come up with a plan …”
Once someone seriously suggests that everyone who benefits should also pay, there will be political will to increase taxes. The plan of which you are already aware will be viable.
The Northwest plan is not necessary. Simply remove the FICA cap. I haven’t done the math myself, but Steve Roth has assured us more than once that this will eliminate any and all problems into the indfinite future. More modestly, the cap could be incrementally raised, as needed.
So, for bkrasting or anyone else, we have two perfectly reasonable potential plans, neither of which involves cutting benefits.
I think the proper way to look at FICA is as a taxing policy with dedicated uses. Hence my preference for eliminating the cap (non-regressive), rather than increasing the percentage (regressive.)
Krugman has addressed SS recently.
http://krugman.blogs.nytimes.com/2011/03/15/social-security-suicide/
http://krugman.blogs.nytimes.com/2011/03/13/cockroach-ideas/
Cheers!
JzB
“Spending authority is passed in specific annual [bills]”
But for SS this is not the case. SS already has spending authority up to the amount in the TF. It does not need a new spending bill.
“in tracking revenues, when they are in excess to outlays due to FICA receipts, the borrowing is from the SSTF”
Borrowing from the TF is not dependent on the general fund. The treasury borrows enough Special Treasuries to cover the SS surplus + interest. If it needs more than that, (which it now does) it sells other Treasuries.
Jack,
The UK spent about 7% on its ministry of defence a couple of years ago, they are cutting rapidly. There are 12 100,000 ton aircraft carriers in the world, not including the ones the US has retired. One is owned by the UK which will go into extended refit to save money. The US Navy operate the 11 remaining super carriers.
The German spend a declining 3% of their putlay on war.
The US at least 20% of outlays go to running, buying and shining half the world’s arms spending. Almost sole owner of the big tickets.
Plenty of money to cover medical and SS outlays if the US gets its priorities straight and cuts back on the unproductive luxuries of the military industrial complex.
CoRev,
“For mandatory spending the Authorizations/Appropriations Agency/Department Obligations steps are short circuited. They are simplified payment/check writing functions once entitlement requirements are met and confirmed by the parent Agency/Department.”
SSA has a 2011 budget: http://www.gpoaccess.gov/usbudget/fy11/pdf/appendix/ssa.pdf
See
Pg 1214
The health of the trust fund:
2009 2010 est. 2011 est.
Beginning of Year: 2,099,838 2,241,184 2,345,076
End of Year: 2,241,184 2,345,076 2,466,103
I can post similar supplements for military retirement and OPM retirmeent trust funds. The big difference is SSA has a huge source of funds from payroll taxes while those other get almost nothing other than appropriations from congress.
Jack
mostly agreed. but its not so much the higher marginal rates as increasing the tax on the amount over 100k (i know that sounds like marginal rate) an effective 3%. that would bring the average tax rate on the higher brackets to around 20%.
Opressed so hard They cannot stand.
Let MY people go!
jazz
raising the cap turns SS into welfare. bad. bad. bad.
forty cents per week allows workers to pay for their own goddam retirement. priceless.
Arne, this says: “For mandatory spending the Authorizations/Appropriations Agency/Department Obligations steps are short circuited. They are simplified payment/check writing functions once entitlement requirements are met and confirmed by the parent Agency/Department.”
the same as this: “But for SS this is not the case. SS already has spending authority up to the amount in the TF. It does not need a new spending bill.” If you are knowledgeable with the terms.
Mandatory spending is SS and others.
Also you said: “Borrowing from the TF is not dependent on the general fund.” there is no borrowing from the SSTF unless the GF revenues are in deficit and FICA collections are in excess. I’m not sure what you mean with: “ The treasury borrows enough Special Treasuries to cover the SS surplus + interest.” What special treasuries? Why would they borrow to cover the SS surplus? They do borrow the SS surplus to cover revenue deficits which are mostly part of the GF.
“regressive tax” is one of those buzzwords that liberals use to destroy their ability to think.
not every problem of the poor needs to be solved by taxing the rich guy.
social security is not a “tax” in the first place. it’s a Federal Insurance Contribution. You don’t charge the rich guy more for his insurance unless he is expecting a larger, or more probable, payout.
Try to retain some standards of fairness and responsibility, for our own sakes if not for the political consequences.
I guess cigarette taxes are a “regressive tax.” the way some liberals would deal with this is to sell ciggies to the poor guy and add the tax to the rich guys bill.
and no, this does not make me a running dog lackey of the capitalist oppressor.
for that matter David Brooks, no friend of SS, workers, or honesty in general, was calling SS a regressive tax the other day. Why? to weaken support for SS.
And some liberal idiots who write for New Yorker were wetting their pants at the idea of a payroll tax holiday… after all, they said, the payroll tax is a “jobs killer.”
nothing that people of either stripe can’t say that is so stupid it will make them stop and think.
ILSM, not sure what your point is. Of course there is a budget. The President, OMB, CBO, SSA, GPO, DoTreasury, BEA, and probably several others I’m forgetting at the moment plan and track SS outlays and the SSTF.
What I said was that the Congressional budgeting functions, Authorizations and Appropriations Agency/Department Obligations are short circuited/streamlined if you wish. Are you saying they go through the total process in full? Certainly, that’s not what your reference says.
Arne, I’m not sure what you are trying to say with this: “ You should expect the rate at which costs increase to be lower than was previously projected.” Perhaps its the use of rate. Care to explain?
Dale, this article really troubles me. There is absolutely no meat in it. You say: “There have been a number of comments and counter-comments on the subject of the definition of “on budget.” And then never use the term again. there is no attempt to provide your own counter definition, and you just go off using analogies to argue points that are well documented. Even you admit that Federal Agency papers were used to define them in prior threads.
You called the government writers of lying when trying to define budget operations. What was the point of this article?
Dale, this article really troubles me. There is absolutely no meat in it. You say: “There have been a number of comments and counter-comments on the subject of the definition of “on budget.” And then never use the term again. there is no attempt to provide your own counter definition, and you just go off using analogies to argue points that are well documented. Even you admit that Federal Agency papers were used to define them in prior threads.
You called the government writers liars when they tried to define budget operations. What was the point of this article?
CoRev
try to read the whole sentence. slowly.
now that those who would have retired next year already retired, perhaps you can expect the rate of retirement next year to be slower than you expected before they retired this year.
CoRev
the point of the article was to suggest you look at the reality behind the “definition”.
the “meat” in it was to try to avoid stupid arguments over words when the facts are available.
the only government writer i can think of “lying” in this context was the CBO man you.. or MG… cited who was claimng that because SS taxes come in across the Treasury desk they are indistinguishable from other revenues.
i beieve i explained what was wrong with that thinking. but i used an analogy.
he spoke always in parables, “lest the wicked hear, and hearing turn, and i should save them.”
in any case
i am glad you agree the facts are well documented.
and we won’t have any more stupid ten thousand word essays on the true meaning of “on budget.”
or silly claims that paying back the money borrowed from the Trust Fund increases the deficit.
(my god, they’re paying off their iou’s?! they can’t do that! we said those iou’s were worthless!!
oh, wait, they’re replacing them with other iou’s? they can’t do that! that would increase the deficit!”)
For some reason the reply to CoRev 5:12:03 appears above at coberly 5:20:18
CoRev,
I am seeking to apply epistemology. Parsing here, looking for knowledge.
My point, and the link: there are appropriations for SS activities including paying out “benefits”, what you believe is “short circuited” needs some relation to truth, that is to see if your belief overlaps with fact.
I linked to the budget of the trust fund including the lines about appropriations.
You said “short circuited” I do not see “short circuited”, the authorization may be different than the fictions from the pentagon, the treasury still gets an appropriation from the legislative authority in the US constitution to send the obligation authority to SSA.
The pentagon’s fictional budgets are “short circuited” by the unwarranted influence of the military industrial complex, none of it based on executable programs, for example see todays GAO.GOV (I am checking dilbert then going to GAO each day lots of traffic) on the Joint Strike Fighter, F-35 GAO 11-450t, nor realistic and feasible “baselines”, nor any auditable financial records of the foundations for their PPBES (I do know what all those words mean).
I would add FAA as another example of the mismanagement and corporate welfare in the “discretionary” side as their attempts to update the air traffic automation in the US has been as well run as the F-35, but there are far too many targets in the pentagon.
The pentagon’s budget is “short circuited” none of it based on any auditable financial records.
BTW, Canada says the F-35 will cost about twice what the pentagon is selling, how does that happen?
Explain “short circuited” or streamlined which ever you see.
Epistemology would be a welcome addition to SS conversations.
Arne,
There are some scenarios where the NPV of the SS annuity cash flow is highest starting earliest.
ILSM, studying the knowledge might be interesting if it didn’t lead to a opportunity to non-pertinent subjects. Three sentences to define your goals and then 5 to six paragraphs on your favorite subject. I’m sorry, but it’s back to ignoring your constant attempts to take threads off topic.
The number of people who are going to retire over the period 2008 to 2015 is not going to being changed much by a recession that starts in 2008. If many of them who would have retired in 2009-2012 retire earlier, then the number who retire in 2013-2015 will be smaller. The blip makes a difference, but it must get back to trend.
Instead of projecting that the rate of increase in SS costs will continue to rise in 2012 because it rose in 2010, you should project that the tate of increase in costs will fall below what was projected before the recession.
The point is that it is SS that decides how much the GF is going to borrow from SS. Perhaps that was already clear in what you said, but I thought it came out unclear.
It is a meaningful distinction. Back in 2001, Greenspan projected the surpluses forward and found that the GF would not want to borrow as much as SS wanted to lend. Because of that he thought tax cuts were a good idea. Turns out predicting the future is tricky.
CoRev
As you’ve been told many times before on this site, the distinction between on and off budget items as the term applies to the SS TF is defined by law. No, I won’t post the link to the SS Admin web page that spells that out because I”ve done so repeatedly and you choose to ignore the citation. Politicians and their lackeys can repeat any description of a process that suits them. That doesn’t make their pronouncements valid. They are made for political expedience. You need to learn the difference between the two concepts, those processes that are legislatively defined and those that are politically expedient. Your inclination to dissemble the facts of the issue is tiring and borders on being deceitful. Try politicking foe the end of wasteful wars and corporate welfare. Then spend your efforts on raising the marginal tax rates and taxing all income in the same manner. Labor shouldn’t be taxed at higher rates than inheritance or gains on assets.
CoRev,
You are saying the SS “problem” is “short circuited” financing or cash budgeting, whatever. It is hard to see your point with made up terms like “short circuited”. What is the open or closed circuit here? Is it corroded or poorly designed? Is it operating in a vacuum?
We need to talk cash management but not limited to your preferred target, which is not the cause of the debt and if paying back a debt is a deficit issue then the issue is broader SS “short circuited” cash management.
Why just worry about poor people plundering when the real plundering is in the military industrial complex? And the medical insurance cabal.
I cannot justy use MIC any more.
Let’s talk the broader causes of the deficit not the one which ravaging hurts the most people.
As I said, the problem is in the 2-20 year range. So the fix has to match that. You plan does not do that. Go back to the drawing board.
You folks think I am blowing in the breeze. Wake up! Even the White House is now talking cuts in SS:
http://krugman.blogs.nytimes.com/2011/03/15/social-security-suicide/?scp=2&sq=krugman&st=cse
Ah but that it cpould be 3030, yes a typo.
No question but that tax increases would support SS. But for the life of me I don’t get you people who think this a realistic and viable option. It is not. There will be no “Fix” to SS that starts with a tax increase. When you take that off the table you don’t have much left.
Sorry.
Words don’t “mean” anything.
This is nonsense. Words are how we communicate; without definitions communication is impossible. That is why we have Dictionaries. This is why legislation and other important documents begin with a section titled “Definitions.”
Co Rev,
This post bothers me.
It reads like a high school student trying to bullshit his way through an essay test for which he is not prepared. Dale wants to be able to define words how he wants so as to excuse his lack of research, and intellectual vigor and discipline. This is why debates with coberly ALWAYS devolve into gibberish.
Arne
greenspan was not a reliable or entirely honest predictor. borrowing money is something the government has done since Alexander Hamilton explained how it works to create both a strong government and an economy more complex than raising feral pigs and moonshine.
i understand what you are saying here, but you are perilously close to saying “SS causes the debt” and that is just backwards. if the government didn’t want to “borrow” the money, SS would just have to “lend” it to other parties, or learn to do without a trust fund. you’d be looking at an economy unrecognizable to capitalism, much less a modern state.
krasting
that’s why we are arguing against the white house.
is your philosophy “if rape is inevitable lie back and enjoy it?” and do you spend a lot of time in bad neighborhoods and short dresses?
and still with “your fix does not match that.”
read the goddam fix. better, get someone to read it to you who understands SS.
and when you take the dinner off the table, you don’t have much left to eat.
what kind of a moron looks at the fix and says, well we won’t do that. and you don’t have much left.
sammy
there are quotes around the word “mean.” i was trying to say that a picture of a horse is not a horse. but you are too illiterate to understand that. then i went on to argue that we need to not waste our time arguing about a word when we could agree about the facts.
except in your case. you have never seen a horse, much less ridden one. so you think a picture of a horse IS a horse.
i don’t think you even passed high school.
what sammy confuses
legislation may begin with definitions. and that helps keep everyone using the same word the same way for the purpose of the legislation.
but a policy “debate” that has partisans scurrying to find “definitions” in out of context places, written by dubious authors, and not consistent with each other, common usage, or the facts on the ground.. is not going to profit much from those competing definitions.
i did not invent this. it is as someone suggested above basic epistimology and used to be taught in colleges under “semantics” or just “intellectual hygiene 101.”
two universities thought enough of my qualifications to hire me to try to teach this to undergraduates. the results were not good. i would have blamed my poor teaching but the other professors assured me this was about all you could expect from “undergraduates,” especially since the time the government decided that all god’s chillun had a right to a college education.
after a few years they gave up, dumbed down the curriculum, and changed it to a right to a college DEGREE if you always remembered your place.
sammy would have been one of those i gave a “gentleman’s C” to because I was tender hearted and didn’t think most people would need to understand this stuff to make a living… in a world that now required a college degree (as evidence that you knew your place). i have been sorry since then to see so many college graduates in places of power who never learned to think carefully.
the picture of sammy standing on the street corner communicating with his friends by furiously paging through dictionaries to get the right “definitions”..
well, it’s a PICTURE of Sammy, it is NOT Sammy.
coberly,
the results were not good.
I am not surprised, at all.
i would have blamed my poor teaching but the other professors assured me this was about all you could expect from “undergraduates,”
You are “blaming the victims” here.
Sammy, the whole article was gibberish. I believe you give him too much credit for the grade level of the effort.
Sammy, the whole article was gibberish. I believe you give him too much credit for the grade level of the effort.
As I do periodically, I’ve just stopped reading his, Jack’s and ILSM’s comments. Their trollish efforts are just not worth the energy needed to sift through the chaff to get to the few kernels.
Sammy
back in the day i would have agreed with you. i saw some poor teaching when i was in school, and had some success as a “tutor,” repairing the damage. but only, as it turned out, with intelligent people who were motivated to learn.
what i learned as a college teacher is that many many of the kids there are not motivated to learn, and there are real differences in “aptitude.” the Navy… very practical people.. studied aptitudes for various Navy jobs and found 30 to 1 differences in ability to do different kinds of jobs.
i have no idea what you do for a living. but just as i wouln’t expect a star baseketball player to understand the foundations of mathematics, i can see that careful thinking is not your forte.
not necessarily any harm in that. lots of good… even intelligent… people can’t do some of the things i can do, just as i can’t do some of the things they can do.
but you also show consistent bad faith and a really juvenile mind. no one would put up with you in a classroom for ten minutes. on the other hand a blog is not a classroom and as irritating as it is, i guess i have to put up with you. but you need to realize that you demonstrate your intelligence every time you favor us with a comment.
it’s not a matter of brilliance. i am sure i am no longer brilliant. but it is a matter of being willing to carefully consider the other guys point.. even if you have to help him make it clear to you. to be honest, not much of that goes on here, so perhaps i am the odd man out. But so far this is the only way i know to try to reach any honest people who may still be “undecided.”
you are irritating, and i am in great danger of feeling contempt for you… but maybe that’s what i am here to learn.
coberly: “But when the CBO publishes a ‘brief” that pretends it doesn’t know that the government owed the SSTF a legal debt, i’d say someone is practicing ENRON accounting.”
Hey, whatever works! 😉
Then paying the interest that MG has been so wrooried about is not happening either.
CoRev,
the whole article was gibberish
Or maybe not. Just as a picture of gibberish is not gibberish, nevertheless the picture can remind anyone who sees it of their own experiences with gibberish, or movie gibberish, or story gibberish.
CoRev,
I will continue to dispute your rhetoric.
You never answer me.
I look for knowledge and from you I get beliefs and whining about asking you to define what you mean by short circuit, and why you ignore appropriation “misalignments” pointed out continuously by GAO which spend as much as SS, in other budgets is not off topic.
Rhetoric is a daunting task.
Read my lips, eh?
“There will be no “Fix” to SS that starts with a tax increase.”
So you are saying “Read my lips”?
sammy
you would understand “gibberish” better if you had ever had the experience of trying to teach algebra to a classroom full of monkeys.
of course it’a all gibberish to you.
If the TF is equal to a year’s costs in 3030, it will be a good thing.
Back to the tax that’s needed to fix the budget. The Social Security program doesn’t need fixing, therefore, it can fore go any tax increase for now. The 2% reduction enacted recently should be restored, but the program doesn’t need tampering. By the time 2037 rolls around most baby boomers will be fertilizer and won’t be beneficiaries. There may be some better balance at that point. Economic forecasters would be better off consulting with the Oracle of Delphi rather than “analyzing” all their future economic data. I love that concept, future economic data used to fore cast future economic conditions and events.
Back to the concept of raising taxes in order to balance the budget. Not that I’m concerned about the deficit mind you, but those who are worried sick over the ever increasing budget deficit I suggest going to the well that has the water. Reneging on the Trust Fund debt holdings is one idea. Raising marginal rates, treating all income as equally taxable and ending corporate tax breaks and other forms of subsidies, see the King of California post above, is a far more equitable means of reducing the deficit. Add to that a substantial reduction in military spending and the budget is virtually on pay-go status. What’s the big argument? How can any other approach make any sense? The rate on high income is absurdly low by historical standards.
Why do the wealthy of today deserve a better break that the wealthy of the recent past? Why do they deserve not to pay for the largess and generally better services they receive from the government? If one small segment of the economy garners the lion’s share of the wealth and income then that segment owes it to its government to provide the support that is required. Do you middle class workers (and retirees) really enjoy picking up the greater share of the expense of government, especially when that government has largely been a government by and for the wealthy whose wealth seems never to perish from this Earth? You upper-middle class folks may even be getting a more raw deal. When we need a little cash we go to the bank because that’s where the money is. It’s no different for the government. Enough money has been sent to the banks and the people with great wealth by way of tax breaks, industrial subsidies and MIC spending. That’s where the money is. That’s how the deficit can be resolved.
CoRev
don’t you ever worry that people will read what you say here and remember it the next time you “periodically” forget it?
CoRev
I came to this site years ago on the recomendation of Bruce Bartlet. Bartlet can hardly be discribed as left of center, nor would his thoughts conform with the prevailing beliefs of the main posters of the time. Bartlet position was that if your arguements are weak they’ll punch holes in them at angry bear. Bartlet was of the opinion that insight can best be gained by reading those who you disagree with, rather then reading those who only afirm your own beliefs. The Joseph Goebbles of our time is Rupert Murdock. Try turning him off, and seek other outlets of information.
coberly
I believe that Sammy is a tradesman, which is the next best thing to being a private in my book. When you impugn his intellect, you do not streghten your arguement as to the viabilty of Social Security. I agree with him here. Blame LBJ for discounting Goerings observation that bullets will make one strong while butter makes one fat, because LBJ promised both guns and butter, which forced Nixon to listen to Freidman’s gobbilty goop about free floating exchange mechanisms. causing Nixon to cancel the Bretten woods agreement and close the gold window, which took away the dollars intrinsic value, and created conditions for an unacountable federal reserve bank. Blame Reagan for trillions of unpayable debt. Blame Bush and Bush dark for the welfare/warfare state that has driven us to financial and moral desastor. But when Sammy says that your insistance that SS is sound is about as credible as King Canutes edict that the tide come no further, remember that calling him stupid is not going to help make those checks clear.
cursed
i would agree that calling anyone stupid is a failure. but i don’t call sammy stupid when he argues against me. i call him stupid when after fifty times of having something explained to him he repeats his juvenile taunts.
all of my near relatives were tradesmen (builders). they were not stupid.
i do not impugn sammy’s intellect. he does. i merely make noises out of frustration with it.
as for SS being sound… well, you could read the Trustees Report and do a little arithmetic and you would have to explain to me why the possible need to raise the tax one half of one tenth of one percent per year to pay for the longer life expectancy of the people paying the tax is “unsound.”
at some point the refusal to examine the evidence, or understand the arithmetic is what us old teachers used to call by the technical term “stupid.”
Not only a good thing but actually the precise definition of ‘actuarial balance’ as applied to Social Security by the Trustees.
Jazz a lot depends on what you mean by “lift the cap”. If by that you mean totally lifting the cap on all covered income then yes CBO tells us that will backfill the entire gap. It also means a 6.2% increase in marginal rates for those who accept a paycheck and a 12.4% increase in marginal rates for those who themselves a paycheck. This doesn’t strike me as being within light years of political plausibility.
There are other proposals to adjust the cap so that it captures the 90% income level, and others to raise it to $250,000 , and the Obama proposal to impose a 2-6% surcharge only on people making over $250,000 most of which are scored by CBO as filling about a third the gap.
I haven’t visited Steve’s web-site for a while, but if he has a concrete proposal for a particular cap increase with calculations as to revenue raised then I would certainly be interested in seeing it and comparing it to CBO scoring. But “lift the cap” is a verbalism and not a plan per se.
Lord love a duck. Hmm if I wanted to find an official definition of ‘off-budget’ where would I look?
Maybe in that section of the Analytical Perspectives on the (President’s) Budget (published by OMB as supporting material for the Budget release) called ‘Budget Concepts and Budget Processes’? Nah, too obvious. But if I foolishly tried it and linked to: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/concepts.pdf
I would surprisingly find some relevant passages. Like this one on page 20.
The budget documents provide information on all
Federal agencies and programs. However, because the
laws governing Social Security (the Federal Old-Age and
Survivors Insurance and the Federal Disability Insurance
trust funds) and the Postal Service Fund require that the
receipts and outlays for those activities be excluded from
the budget totals and from the calculation of the deficit
or surplus, the budget presents on-budget and off-budget
totals. The off-budget totals include the Federal transac-
tions excluded by law from the budget totals. The on-bud-
get and off-budget amounts are added together to derive
the totals for the Federal Government. These are some-
times referred to as the unified or consolidated budget
totals.
Social Security OASDI and the Post Office are Off-Budget.This passage is illustrated by Table 12-1 on the same page which tells us that in 2010 the Unified Deficit was $1.293 trillion, a total derived from adding a $1.370 tn On Budget Deficit with a $77 bn Off Budget Surplus.
There is lots more in this helpful document (which I have at least browsed through which I suspect is more than some who point to it have) but I am in a rush so let me just skip to the Definitions section:
Off-budget refers to transactions of the Federal
Government that would be treated as budgetary had the
Congress not designated them by statute as “off-budget.”
Currently, transactions of the Social Security trust fund
and the Postal Service fund are the only sets of trans-
actions that are so designated. The term is sometimes
used more broadly to refer to the transactions of private
enterprises that were established and sponsored by the
Government, most especially “Government sponsored
enterprises” such as the Federal Home Loan Banks. (Cf.
budget totals.)
You can use the terms ‘budget’ and ‘deficit’ in different ways with more or less degrees of strictness, but when it comes to THE Budget of the United States and THE Deficit as reported therein both have specific definitions which are fully available. Can we at least agree on the authority of this […]
Bruce
forgive me. i am a little tired and i did not read your comment carefully,
but i remember some confusion arising from use of the “unified budget” in which the money borrowed FROM Social Security was counted as revenue. Perhaps the people talking this way were not speaking strictly according to the definition you just cited.
nevertheless they created confusion. Money borrowed from SSTF is indeed “borrowed money” and it contributes to “the debt” and paying it back does not increase “the debt” but decreases it.
I believe you understand this, but I get lost in all the “definitions.”
Min ‘Budget’ is formally defined on page 133 of the Analytical Perspectives on the Budget which is the supporting material to the bare numbers of the Budget as presented. It is pretty simple:
Budget means the Budget of the United States Government, which sets forth the President’s comprehensive financial plan for allocating resources and indicates the President’s priorities for the Federal Government.
Other definitions of interest:
Deficit means the amount by which outlays exceed receipts in a fiscal year. It may refer to the on-budget, off- budget, or unified budget deficit.
General fund means the accounts in which are recorded governmental receipts not earmarked by law for a specific purpose, the proceeds of general borrowing, and the expenditure of these moneys.
Note that for the General Fund proceeds from borrowing are counted as receipts. But not for the Budget:
The budget treats borrowing and debt repayment as a means of financing, not as receipts and outlays. If borrowing were defined as receipts and debt repayment as outlays, the budget would always be virtually balanced by definition. This rule applies both to borrowing in the form of Treasury securities and to specialized borrowing in the form of agency securities. The rule reflects the commonsense understanding that lending or borrowing is just an exchange of financial assets of equal value—cash for Treasury securities—and so is fundamentally different from, say, paying taxes.
This latter would seem to put Co-Rev’s claims that borrowing to redeem TF Special Treasuries ‘obviously’ adds to the deficit in some doubt. If such borrowing is neither a receipt or outlay then it won’t show up in the calculation of annual deficit/surplus. See Table 12-1 on page 120.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/concepts.pdf
Krasting the amount of funds needed to finance the Trust Fund interest and then principal (after 2023) over your 2-20 year time frame are relatively insignificant. At least by any number series outside the one you concocted based on your own unsourced calculations. Not to mention that we have been financing that in the case of DI since 2006 with no apparent impact on the bond markets.
Your “won’t be allowed to happen” is just a pure unsupported assertion on your part.
The Executive Branch since 1969 has desired to treat all spending as part of one large budget pot, and Congress has continuously said NO. That’s why you find sentences written by OMB like the one Webb cited: “Off-budget refers to transactions of the Federal Government that would be treated as budgetary had the Congress not designated them by statute as ‘off-budget.'” Darn that Legislative Branch, always interfering with what’s right!
A useful depiction of Social Security’s status over time is at the SSA website (at http://www.ssa.gov/history/BudgetTreatment.html). It focuses on legal status. As Coberly shows, there are multiple dimensions to this. The political dimension, and a battle between two branches of government, is one of them. The Executive has influence and publications; Congress has the Constitutional high ground.
cursed
unless i overlooked something, it appears i did not call sammy stupid. were you just reading between the lines?
Addendum: As part of the political battle, when Congress revised the budget process in 1990, it made it chrystal clear to the Executive Branch that Social Security remains off-budget by law:
H.R.5835 Omnibus Budget Reconciliation Act of 1990 (Enrolled Bill [Final as Passed Both House and Senate])
SEC. 13301. OFF-BUDGET STATUS OF OASDI TRUST FUNDS.
(a) EXCLUSION OF SOCIAL SECURITY FROM ALL BUDGETS- Notwithstanding any other provision of law, the receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of–
(1) the budget of the United States Government as submitted by the President,
(2) the congressional budget, or
(3) the Balanced Budget and Emergency Deficit Control Act of 1985.
(b) EXCLUSION OF SOCIAL SECURITY FROM CONGRESSIONAL BUDGET- Section 301(a) of the Congressional Budget Act of 1974 is amended by adding at the end the following: `The concurrent resolution shall not include the outlays and revenue totals of the old age, survivors, and disability insurance program established under title II of the Social Security Act or the related provisions of the Internal Revenue Code of 1986 in the surplus or deficit totals required by this subsection or in any other surplus or deficit totals required by this title
As noted in my e-mail debt and deficit are not pure equivalents nor is the former the simple sum of the latter. Social Security surpluses whether in the form of cash or interest credited to the Trust Funds count as a
surplus for current year deficit calcs even as they add dollar for dollar to Public Debt.
Basically it would seem that OMB assumes Treasury’s credit is good even in respect to Special Treasuries even as Treasury perforce has to book those Treasuries as debt obligations.
Which is why OMB, at least in the Analytical Perspectives, reports all three of On-Budget, Off-Budget, and Combined (what was formally legally known as Unified and still informally called as such).
And despite this provision of law the top line Deficit number reported by the MSM (and the one you would derive from the bottom line of a CBO legislative score) is the so-called Unified Budget number.
From the stench of the diapers to the ditty of the grave all must go to the Pharoah? Thanks but I think I’ll pass.
Social Security is but one leg of a secure retirement. A man should form a family and a comunity of friends. He should also aquire a home as well as a savings. You would have the SS burden grow to the extent that other legs would be neglected. This would make us more dependent upon the government, and being dependent is the opposite of being secure. You are peddling social insecurity for future generations, so that you might be secure. My generation should not be asked to accept a heavier yoke, while yours makes makes no sacrifice.
cursed
i am sorry you have an opinion of what i want without having read what i wrote.
a man should form a family and a community of friends. sometimes that does not work out.
Social Security takes a little of your money when you have a lot, and gives it back to you… plus interest… when it is likely you will have a lot less. this is the experience of eighty percent of the people who get old in this country. SS is not a burden. it is insurance.
if you can’t make a living, and make investments, on the ninety percent of your income that SS does not touch, you are not smart enough to make a living or make successful investments.
before there was Social Security your recent ancestors worked in sweatshops and died in work houses. for some unexplained reason the rise of american prosperity coincided with the introduction of Social Security. But you are still living in a John Wayne movie. fine for you, but i hope you will excuse the rest of us if we cooperate on a plan to take some of the risk out of growing old.
contrary to your inability to do arithmetic, i am “peddling” security for future generations. for the horrible burden of an extra forty cents per week, and an intolerable increase in their dependence on government… which does not include a draft, or an economy that goes up and down beyond your control… those future generations can secure at least a basic living after they are too old to work.
this has not a goddam thing to do with MY security. i will be dead before even the Republicans can destroy this country with big balled small brain fantasies such as yours.
tell me about that yoke again.
my generation made the sacrifice of changing your diapers. wasted effort. if we had known you would grow up to roll in your own shit because you like the smell of it so much we could have saved ourselves the bother.
Bruce
that is exactly why i wrote this essay. to try to get outside the confusion caused by ENRON accounting. you can call a deficit a surplus, but its still a deficit.
from which we can see why there is so much confusion.
Bruce, we can agree on terms if we understand that it is bureaucratic/government speak. The definition for deficit in you own referenced document is:
“Deficit means the amount by which outlays exceed receipts
in a fiscal year. It may refer to the on-budget, offbudget,
or unified budget deficit.” Page 134.
When you, Dale, and the others make statements that SS is not part of, or does not add to the “overall/unified” budget deficit, you are wrong. On every chart I have seen in the OMB Budget Doc where deficit is shown both On/Off Budgets subtotals and their sum are shown. From an operational stand point SS surpluses/deficits also show in the total.
For all the laws, regulations, reports and claims here, that it is not included, every time we look at the operational reports we see it as part of the total/unified budget.
So, “And despite this provision of law the top line Deficit number reported by the MSM (and the one you would derive from the bottom line of a CBO legislative score) is the so-called Unified Budget number.”
we can agree tnat the SS numbers, surplus and deficit, do actually get counted in the Actual/total/unified budget deficit.
So, “And despite this provision of law the top line Deficit number reported by the MSM (and the one you would derive from the bottom line of a CBO legislative score) is the so-called Unified Budget number.”
We can agree that the SS numbers, surplus and deficit, do actually get counted in the Actual/total/unified budget deficit.
well CoRev
apparently we cannot even agree about that. the unified budget appears to count the money the on-budget borrows from the off-budget as revenue which reduces the on-budget deficit.
the whole point of my essay was that this is dishonest accounting. fortunately the people who carry out the policy know the law and ignore the definition, so the TF iou’s are actually being paid off as we speak to make up for the cash flow shortfall… that is doing the job it was designed to do.
at least you have good company in your confusion. and lots of really bad company.
me, i think i’ll go out and clean the barn. i need to see some intelligent faces.
CoRev read closer. Per OMB public borrowing does not get included as an outlay for surplus/ deficit calculations and so does not add to the deficit as defined.
You are trapped in category confusion. Repayment of the Trust Fund might result in a wash in Public Debt if Intragovernmental Holdings are replaced by Debt Held by the Public, or even increase latter if interest payments were not offset by revenues, aka tax increases. But either way doesn’t add to the deficit as defined.
Wiggle however much you want, in federal accounting deficits don’t track debt on a one to one basis.
Dale by ‘faces’ I am hoping you mean the livestock and not their litteral end product, I.e ‘feces’. Though I am always mindful in some of my interlocutions here of the time honored judgement of “dumber than dog-shit”
CoRev yes those surplus/deficit numbers get included. Which doesn’tmean that Trust Fund redemptions do as such.
You got that piece dead wrong.
Coberly
At least your generation had the willingness to wipe little butts. The boomers however fornicated for their selfish pleasure, and murdered their issue for simple convenience. Now enfeebled with age they are collectivally panicking like chickens with out roosts, when the sun goes down.
Don’t look for this government for help you. I can only hurt. It suduced the boomers with lies, and encouraged them to chase the golden calf. Now you want me to double up on a bad bet. Fat chance on that.
If I need to put in more, does that mean you did not put in enough? If I must pay more will you share the sacrifice and demand less? Or is this just a one way street?
Not one of my ancestors ever worked in a sweat shop. Americas rise to prosperity did not coincide with social security. America’s prosperity predated it. Americans have long enjoyed a higher living standard the Europe.
You falsely atribute America’s rise in the world with Social Security rather then our having slaughtered all of our industrial competitors during the fourties.
Face it! This government doesn’t just lie to Indians any more.
cursed
you are on a fantasy trip of your own. i can’t help.
you will get back any money you put in SS, plus interest, at a time when you may need it a lot more than when you put it in… unless you let the bipartisan criminals in washington “fix” it. i have tried to explain that in some detail on this blog. it doesn’t seem to have helped you to understand what is at stake and what it costs.
you would need to put in more if your life expectancy is greater than mine…. as a member of your generation compared to mine. individual life expectancy is not guessed at.
i have no idea what your ancestors did, but in general there was much much more poverty before the new deal than after it. perhaps it was the war spending. perhaps SS had something to do with it. i can’t say. neither can you. what strikes me is the degree of whining among the richest people the world has ever seen about how oppressed they are.
Bruce
you could call astro turf “grass” and a horse still won’t eat it. that makes him smarter than people who call a debt “revenue.” and those people are smarter than the ones who believe them.
and yes, a walk with the dogs is more productive than arguing here.
Bruce, now you are trying to convince us that using the SS revenue surplus to lower the actual/total/unified budget deficit, that SS revenue deficit, funded by redeeming the SSTF treasuries, are not used to calculate it? Nope! Doesn’t pass the logic test.
Look folks, The laws, regulations and procedures are overlapping and contradictory, but when it comes down to daily operations US governments are always going to err on the “common sense” side. Why? Because we are always aware that there are 300M+ auditors out there. Every action gets reviewed by you folks who are interested as well as the internal audit agencies and the IGs.
Bruce, from an operational stand point you are absolutely correct: “ Which doesn’tmean (sic) that Trust Fund redemptions do as such.” That would be double counting! Redemption of the SSTF is another accounting step as is the creation of the SSTF Treasuries when SS revenue is in surplus. The step converting those treasuries into spendable revenue is where the calculations matter.
When you read the OMB document referenced you will find a description where the “deficit” and “debt held by the public” may not match. Those differences are small and usually due to differences in timing between the revenue collection, outlays (check writings) and deficit calculations. They usually mean that the redemptions (an accounting function) are out of synch with the revenue/outlay flow, but those differences will be picked up when the outlays catch up.
For all the politics, word salad, and deliberate confusion regarding the SSTF and the actual/total/unified budget deficit the operations surrounding the calculations are logical and done in a rational world according to good accounting practices.
Bruce, I think you misspoke here: “Social Security surpluses whether in the form of cash or interest credited to the Trust Funds count as a
surplus for current year deficit calcs even as they add dollar for dollar to Public Debt. ”
Didn’t you mean “overall” debt. Public debt is incremented when there is no SS surplus (SS revenues in deficit versus outlays) or when there are other revenue deficits requiring public borrowing.
Bruce, your kidding us again! Show us the reference and quote for this statement: “Per OMB public borrowing does not get included as an outlay for surplus/ deficit calculations and so does not add to the deficit as defined.”
Moreover, show us where I made this linkage: “…deficits don’t track debt on a one to one basis.”
This is what the OMB documents says about it: “When outlays exceed receipts, the difference is a deficit,
which the Government finances primarily by borrowing.
When receipts exceed outlays, the difference is a surplus,
and the Government automatically uses the surplus primarily
to reduce debt. The Government’s debt (debt held
by the public) is approximately the cumulative amount of
borrowing to finance deficits, less repayments from surpluses,
over the Nation’s history.” Page 129. (My emphasis)
So you used a lot of words to confuse the issue which is actually quite clear. You also confuse the issue by addressing claims (…deficits track debt…) never made.
Your attempt at confusion appears quite deliberate, which has been a continuing effort. The most obvious attempt at confusion is the claim: Social Security did not cause the deficit, another claim never made as far as I can remember.
Another attempt to deflect is the use of terms as: “deficit as defined” which is nicely defined in the first sentence I quoted from the OMB doc. “When outlays exceed receipts, the difference is a deficit,…” That’s a very simple and elegant definition. Elegant in that if we track back to the definition of receipts in this document they are talking about “total receipts” meaning the SS revenues are included into that number.
Another myth dispelled by the OMB document.
i am sorry you have an opinion of what i want without having read what i wrote.
a man should form a family and a community of friends. sometimes that does not work out.
Social Security takes a little of your money when you have a lot, and gives it back to you… plus interest… when it is likely you will have a lot less. this is the experience of eighty percent of the people who get old in this country. SS is not a burden. it is insurance.
if you can’t make a living, and make investments, on the ninety percent of your income that SS does not touch, you are not smart enough to make a living or make successful investments.
before there was Social Security your recent ancestors worked in sweatshops and died in work houses. for some unexplained reason the rise of american prosperity coincided with the introduction of Social Security. But you are still living in a John Wayne movie. fine for you, but i hope you will excuse the rest of us if we cooperate on a plan to take some of the risk out of growing old.
contrary to your inability to do arithmetic, i am “peddling” security for future generations. for the horrible burden of an extra forty cents per week, and an intolerable increase in their dependence on government… which does not include a draft, or an economy that goes up and down beyond your control… those future generations can secure at least a basic living after they are too old to work.
this has not a goddam thing to do with MY security. i will be dead before even the Republicans can destroy this country with big balled small brain fantasies such as yours.
tell me about that yoke again.
my generation made the sacrifice of changing your diapers. wasted effort.
What has raised my hackles recently in reguards to SS was an observation made by a friend. He said that “I just got my son a ss card today. Because he is a premature we get another seven hundred and something dollars every month”. My friend does not work. His girlfriend does not work. The less then 9 month old baby does not work. Nobody pays into the system. This is not an old age pension, This is just another government transfer payment. I had an 86 year old sometimes friend who just died. He never made more the $5 an hour. He recieved @ $600 a month from SS. Where is the equity here. The old man got jucked, while the unmarried welfare couple gets a free ride. Now I feel an obligation to the generation that wiped my little butt, but not to the couple living in sin.
Cursed–Your friend seems to have a disabled child whose birth weight qualifies him/her for SSI disabled child’s benefits. In order to be eligible under this provision of Title XVI of the SS Act, a child must weigh about half of normal birth weight for a full term child. Usually, these babies weigh 1 to 2 lbs. at birth and lose further weight after birth.
Many of these babies don’t survive, but the ones who do suffer from long-term health effects as a result of premature birth and are considered disabled until their various health problems are resolved. Those SSI benefits are paid for through general revenues and are means-tested. Your friend and his GF may also be eligible for TANF benefits which are also means-tested but temporary.
One way or another, the hospital and medical providers who would otherwise treat this child at a loss get paid through Medicaid for the enormous expense of keeping this child alive and continuing any necessary treatment as long as the child needs it. This is the current state of the law. I think many in the medical community would strenously oppose eliminating this benefit. Many such children would inevitably die without this provision of the law.
Perhaps your older friend was around long enough to have earned more in covered employment more than you think. Or he could be eligible for SSI or a survivor’s benefit under SS or both. One way or another, the general benefit to society obtained by keeping people alive, fed and sheltered is great. You judge these people in terms of their contribution to society. But, only the grace of God keeps you and me and all of us from being in their situation. The same SSI and SS rules apply to you. That’s as good as it gets under our legal system.
I think that having a large, permanent homeless underclass is not good for our country. Benefits like these is what it takes to prevent that result. It is revolution insurance, if you will. Cheap at the price considering the alternative. NancyO
Just to add another supplement to Coberly’s nice overview, an excellent document that explains the concept of off-budget comes from the Inspector General of the United States Postal Service. http://www.uspsoig.gov/foia_files/ESS-WP-09-001.pdf It’s worth a look because it is rather honest and straightforward, touches upon important legal, historical, political, and financial dimensions, and has no possible axe to grind regarding Social Security. And the IG does not ignore the question of “why this matters.” For example, a few chosen words from the executive summary:
“More specifically, our review demonstrates that
• Although the Postal Service Fund is technically not included in the budget the
president sends to Congress each year, it is included in a broad economic
concept called the “unified federal budget” that captures all government
transactions with the public.
• Both the Office of Management and Budget (OMB) and the Congressional
Budget Office (CBO) concentrate their attention on scoring changes to the unified
federal budget, primarily because it allows large surpluses in the Social Security
Trust Funds to offset deficit spending elsewhere in government. The Postal
Service is an inadvertent victim of this strategy.”
And from page 2: “Many federal programs would like to share
the independence now enjoyed only by the Postal Service and Social Security. For
example, protectors of the Highway Trust Fund, the Airport and Airway Trust Fund, the
Inland Waterways Trust Fund, and the Land and Water Conservation Trust Fund argue,
so far to no avail, that these activities are so important they too should be shielded from
overall budget pressures and limitations.”
CoRev–You worked for the govt at a pretty high level. I don’t know for what agency. If you worked for OMB, GAO or CBO, you are certainly more familiar with the way the budget works than I. However, I do know one thing regarding the budget that is observable year after year. SSA is appropriated a sum of money set aside from FICA revenues (and general revenues for SSI only) each year to operate its various programs. But, the benefits themselves are never appropriated. Neither Congress or the President can recommend benfits payable to current beneficiaries be cut or recomputed as part of the annual budget process.
The determinations of eligibility for benefits and the computation of benefits for every claimant are made by SSA and by no other branch of government. Congress writes the rules for benefits, COLA’s and so on, but does not appropriate any exact sum of money as part of its 13 appropriations bills. So, I’m calling that the operational definition of “off budget.” I am not disagreeing with Bruce’s cites or PJR’s observations. I am trying to say, as PJR puts it, that “off budget means off budget cause Congress says so.” Power of the purse, you know, and all that.
I truly wonder how it can be that such intelligent people of obvious good will as comment and post here can contend so furiously together about simple stuff. This stuff is simple. Now, if you want to abolish SS, just say so, and we can get on to the real hollering and cussin’. Those who want to reduce the future income of retired people should have a scheme at hand to provide for that decrease in the GDP that would be caused by such a move. What is the plan for the future that will stimulate wages, provide an industrial strategy, and encourage investment in the US? And, how will it affect the population as it ages out of the workforce?
Milton Friedman once remarked about Social Insurance programs that he provided for none because he didn’t have to. Well, the people in Congress and those who seek to influence them DO have to. And, ordinary people get to express their will in this regard. They call it government. NancyO
CoRev–I am calling you out. 🙂 Do you or don’t you want to abolish SS in its current form? Because, if your idea for doing so has sufficient merit, you won’t need to parse and reparse the meaning of that odious and deadly phrase, “Unified Budget/Deficit/Debt.” You will have a clear and compelling rational for a sensible replacement or modification of the existing SI scheme, period. And, no, I don’t call relying in GS or Citi or the NYSE to provide retirement and other income for people adequate to replace SI. And, no, you don’t get to ignore the net effect on DNP. Go for it! NancyO
pjr
thanks.
you and me and the post office against the world.
Nancy, no! I do not, have never proposed, to abolish SS in its current form? What I am reacting to are the obvious lies/misconceptions/misunderstandings that SS does not add to the deficit, that SS revenues are not part of the overall revenues when calculating deficits and therefore since they are included not truly dedicated to SS, and that attacking SS is the number one issue of the budget cutters.
So, the entirety of your premise is incorrect, and is representative of the Democratic response to what has been a Democratic lead attack on SS. Most of the arguments have been with yourselves and over your own fears that are not present in actual budget proposals.
If your sole purpose is to react to “obvious lies, etc etc…” then you have given your version of the meanings of various budget terms and so on many times. We here know what you think on these topics. Some of us here think you’re wrong. Let me put it this way. What is your purpose in insisting that SS is part the budget, deficits, and “unified debt” if not to change, diminish, or undermine the SI system in its current form? For example, why oppose tax increases for SS and other other forms of income to help with what you see as an overwhelming debt burden?
What problem are you solving when you put SS in the budget? How does that help? Or, how does it hurt to leave SS out of the budget and out of the debt calculations?
We have been around on this so many times that I just don’t see the purpose in staying in this endless loop. Therefore, what do you propose to accomplish by including SS in the budget? Simple question. Well? NancyO
Nancy, what part of this statement of mine contradicts yours? “For mandatory spending the Authorizations/Appropriations Agency/Department Obligations steps are short circuited. They are simplified payment/check writing functions once entitlement requirements are met and confirmed by the parent Agency/Department.” ILSM, objected to the use of short circuited, but I think the meaning is clear to you and I.and r
For these many weeks you folks have essentially been arguing against and over reacting to your own fears of the bogeyman coming in and dramatically changing SS. No such proposal, AFAIK, has ever been proposed. Not here and not in legislative discussions.
Circling the wagons around SS appears to be a reflexive response for Democrats, but it is your own party that made the most significant changes.
Some of my earliest comments were trying to put the over zealous SS discussions into context of the overall budget/deficit issues. They have not changed, but we have more misstatements, that have finally been refuted.
There is no doubt in my mind that a stake has been put into the heart of the “protect SS at all costs” argumentation that is ongoing. The adults are sitting on the sidelines laughing at the frenetic and off-base comments.
CoRev
obvious lies. ?
give us a break.
actual budget proposals?
you must mean not the ones i have been hearing about. maybe you mean whats in the current President’s budget. on the theory that we should shut up and wait to get screwed before we complain.
you are either insane or a very sophisticated liar. i used to think the former. lately i have come to think the latter.
Nancy, had you not said this: “ Some of us here think you’re wrong.” I would have just let it go. As I have said you are arguing with the wrong person. Take the argument up with CBO, OMB, Congress, and the many others who operate with those very same: “… meanings of various budget terms…” from which we have either quoted, referenced or paraphrased.
You also claim I am: “… including SS in the budget?…” I am not including it. The very numbers Bruce showed and referenced last night were from the 2012 president’s budget.It is these misunderstandings and misconceptions which drive the anger and confusion on the Democratic side, and my responses to try to correct them.
You folks try to blame us who are trying to correct those misconceptions, for all things bad, and read far more into what we say. So, let me challenge you. Where is there legislation or discussion of legislation that dramatically changes SS, and I don’t mean that material which if implemented puts SS on long term solvency.
Nancy, what part of this statement of mine contradicts yours? “For mandatory spending the Authorizations/Appropriations Agency/Department Obligations steps are short circuited. They are simplified payment/check writing functions once entitlement requirements are met and confirmed by the parent Agency/Department.” ILSM, objected to the use of short circuited, but I think the meaning is clear to you and I.and r
For these many weeks you folks have essentially been arguing against and over reacting to your own fears of the bogeyman coming in and dramatically changing SS. No such proposal, AFAIK, has ever been proposed. Not here and not in legislative discussions.
Circling the wagons around SS appears to be a reflexive response for Democrats, but it is your own party that made the most significant changes.
Some of my earliest comments were trying to put the over zealous SS discussions into context of the overall budget/deficit issues. They have not changed, but we have more misstatements, that have finally been refuted.
There is no doubt in my mind that a stake has not been put into the heart of the “protect SS at all costs” argumentation that is ongoing. The adults are sitting on the sidelines laughing at the frenetic and off-base comments.
CoRev–I give up. NancyO
No answer NO??? Don’t want to do the work to confirm, or not, your perception(s)?
“• Both the Office of Management and Budget (OMB) and the Congressional
Budget Office (CBO) concentrate their attention on scoring changes to the unified
federal budget, primarily because it allows large surpluses in the Social Security
Trust Funds to offset deficit spending elsewhere in government. The Postal
Service is an inadvertent victim of this strategy.” from above
I’ve bolded what I believe to be the most important clause in that statement. It was said by a high ranking official with responsibility for the sanctity of the PO Trust Fund. It was not said by a political flack. It virtually accusses the OMB and CBO, both political organizations at their cores, of obfuscating the budget picture at the expense of those workers that will need to rely on the two funds referred to for a significant portion of their retirement income. And so the real sources of the budget deficit are obscured, hidden from close examination and the workers’ funds become the focus of all deficiency when it is time to recognize that there is, and has been, a deficit situation in the general budget. Now that the recognition is made all too clear it is suddenly the very mechanism that allowed the original obsuring of that deficit that is said to be the source of the deficit. It sounds confusing because it is a process that was initiated with the intention to confuse. Excess funds from the Trusts were used to cover the deficits of the past budgets and now are identified as the source of the deficit in the present budget. It’s a use of language not different than a Tea Party discussion with the Hatter and the March Hare.