Does the 14th Amendment require the repayment of borrowed Social Security funds

[JDPriestly]

The 14th Amendment includes this provision:

4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

After reading that, do you think that Alan Simpson and friends can argue that the government has no obligation to repay the money it borrowed from the tax revenue raised specifically for Social Security?

Edited to correct the number of the amendment.

[BzaDem]

1. Even if the 14th amendment does force the government to pay back the trust fund

there is nothing that prevents Congress from simply lowering benefits regardless of the size of the trust fund (or to pass a law simply giving the balance of the trust fund to the Treasury, without a bond in return).

The Supreme Court has ruled specifically that there is no contractual entitlement to Social Security benefits, and that Congress could change or remove benefits at any time.

[Demeter]

4. The Supeme Court Is Full of It

Got my pitchfork out of storage.

[JDPriestly]

7. The Supreme Court may decide as it wishes. I think that the American

people and foreign purchasers of our debt will see that differently.

[BzaDem]

9. Purchasers of our debt would probably look favorably on SS cuts.

They won't default on the trust fund bonds -- they'll just leave them to use to pay out benefits over a longer time.

The American people, however, of course would be opposed to SS cuts on policy grounds (and good for them).

[DCKit]

2. Agreed. He doesn't have an argument to "excuse" that debt. nt

[ParkieDem]

3. There are two questions:

The first is whether Social Security benefits are a "property right" and subject to the "takings" clause under the 5th Amendment. The Supreme Court has held that they are not.

http://en.wikipedia.org/wiki/Flemming_v._Nestor

The second is whether a recipients right to a benefit is protected by the Due Process clause under the 14th Amendment. The Flemming court held that, in that particular instance, they were not. The question could get raised again, but benefits are likely only going to be protected by Due Process if the government action is "arbitrary" or "utterly lacking in rational justification." If the justification is overall fiscal solvency, I doubt the court would find a due process right here.

[JDPriestly]

8. That may be the correct legal analysis, but I don't think that the American

people will vote for a politician who actually reneges on the debt.

[Igel]

5. "Public debt."

Define it.

Is it money owed to private individuals, whether individually or collectively or corporately? If that's the definition, then the SS trust fund's excluded. It's owed by the Treasury Dept. to the Social Security Administration. Both are creatures of Congress, ultimately. In fact, it's illegal for any private individual (etc., etc.) to own any of the notes constituting this obligation.

Is it money owed by the government to anybody or anything? If so, fine. Issue a check to the SSA for however many trillion dollars. Of course, have the same bill require that the same number of trillions of dollars be turned over to the Treasury. Voila: Debt's expunged.

The point everybody keeps missing is that the Social Security trust fund debt isn't held by individuals. It's held by a branch of the government and issed by a branch of the government--the SSA may be a semi-autonomous organization, but its workers are civil service, its director is approved by Congress, its charter is upheld at Congress' discretion. At times the director's reported to a cabinet secretary (or been one, the distinction's unimportant) and thus clearly under the Executive. If Congress directed the SSA to forgive the debt and turn over the bonds it holds (in electronic form, no doubt) to the Treasury Dept. for deletion or destruction, the SSA would dutifully turn over the notes. Voila. Debt's expunged.

Nor is the debt owed to individuals. It's owed to the Social Security Administration. Social Security beneficiaries have no right, other than that granted by Congress and revokable by Congress, to any of that money. They set the rates. They set the tax level. There's no claim to be made if the debt's expunged or otherwise never repaid.

[JDPriestly]

6. The 14th Amendment says what it says.

The money was collected based on the representation that it would be repaid, that it belonged to the Social Security fund. I think that the government that condones and makes official the theft of that money from the Social Security fund will find that it is no longer trusted by other nations or private purchasers of its bonds.

Reneging on your own citizens is a pretty horrible crime. It means that the government accepted the payment of the money based on a contract with its own people to repay the money. A government that reneges on a deal with its own citizens is not trustworthy. Our bonds are based on our word. If the US government cannot keep its word to its senior citizens, how can it be trusted to keep its word to foreigners?