Marilyn Geewax at NPR has an article Oct. 24 on the debt ceiling, whose progress this week seems very uncertain, “Why you shouldn’t stare up at the debt ceiling and yawn”, link here. It seems relatively inconclusive, but it appears that some Republicans don’t take seriously how much damage they can do to financial markets. Perhaps they’re used to playing chicken, because that’s how a lot of people manipulate others.
I’ll give the discussion link of payment prioritization from Lawrence Tribe’s comments (New York Times), from back in January 2013 again. Notice I have a question where I pose a theoretical scenario where some Social Security beneficiaries could lose all future benefits suddenly. The legal experts shoot me down (look for “Boushka”), thankfully. They would also shoot down what NPR says.
Since Social Security is a “bond holder”, it has as good a claim as any other creditor. But theoretically, Congress could impose immediate means testing on all future payments, even for current retirees, because of Flemming v. Nestor – which effectively means that FICA is a tax or possibly an “insurance premium” for social insurance like welfare, but not a contribution to a constitutionally guaranteed annuity payment (like an annuity premium in the life insurance business).
The surest way to protect existing past FICA “contributions” (as “property”) is to pass a law privatizing them – turn them over to the private life insurance business, but under heavy regulation. I do support gradual or partial privatization. The GOP supports this. But why doesn’t the GOP guarantee that the US government will always pay its bills already due?
Update: Oct. 26
Jacob Lew's own op-ed in USA Today on the dangers of an "accident" with the debt ceiling.
Update: Oct. 27
Various media reports on a budget deal to raise the debt ceiling, such as ABC's here. See posting Tuesday.