(Mike Chamberlain/The Cranky Hermit) – Nevada’s Senior Senator responds to an earlier blog post by Las Vegas Review-Journal editor Thomas Mitchell with a letter to the editor the R-J published [04/11/2011]. Reid discusses the Social Security Trust Fund and its $2.5 trillion in assets.
To claim that these are “mere IOU’s” that are subject to default is to argue that the U.S. government would treat China better than our own seniors. That may be Mr. Mitchell’s preference, but it will not happen, and it shouldn’t. Not only because it would be grossly unfair to the millions of working Americans who have contributed to the fund, but because defaulting on a legal obligation could undermine our nation’s financial standing, substantially increase interest costs, and weaken our economic future.
Reforming Social Security would help to reduce the liabilities owed by the federal government, which is what the bonds in the Trust Fund represent. Yet Reid opposes reform that would reduce these liabilities. He has also opposed even modest spending restraint.
Apparently, judging by such opposition and this LTE, his preference is to stiff our foreign creditors rather than embrace reforms that might reduce the future obligations of the U.S. Either that, or Reid must believe that the ability of the U.S. to incur debt is infinite – that we can continue to make unlimited promises without consequence.
Otherwise, he would not oppose reforms to Social Security that would help extend its solvency, which Congress provided for when it reserved for itself “[t]he right to alter, amend, or repeal any provision” of the Social Security Act.
The only reform he has expressed support for is raising the earnings limit. Far from fixing Social Security, this would simply make the problem worse. This would merely mask the impact of over-spending by diverting more Social Security revenue to Congress to devote to current spending and it would increase, not reduce, future Social Security liabilities.
Reid is content to play politics with this issue by ignoring the problems brought about by over-spending and smearing those who are truly concerned about the consequences of increasing federal government liabilities. By demonizing his opponents and frightening seniors into believing his opponents want to steal their Social Security benefits while ignoring the impending crisis himself, it is Reid who shamelessly employs scare tactics.
