Defaulting on the Trust Fund

DEFAULTING ON THE TRUST FUND….I have a question. Matt Yglesias tried to explain the president’s Social Security program yesterday, and while his explanation isn’t bad, it suffers from the fact that the president himself hasn’t actually proposed a plan yet. The only thing we Social Security Kremlinologists have to go on are his spokesman’s fumbling attempts to lay out some principles prior to the State of the Union address.

This is undoubtedly deliberate. When your plan is a bad one, confusion works to your advantage. But here is Matt’s understanding of the first part of Bush’s privatization scheme:

The first phase is to default on the General Fund’s debt to the Social Security Trust Fund in order to make room in the budget (sort of) to make the Bush tax cuts permanent.

Now, it turns out no one has ever actually said this. Rather, Matt is inferring it from all the talk of Social Security’s problems starting in 2018. After all, the only thing that happens in 2018 is that the trust fund starts redeeming some of its bonds, so there’s no reason to mention this date as a “problem” unless you think that redeeming those bonds is also a problem.

So here’s my question: why hasn’t anyone just asked the White House if they think the government should default on the trust fund? It seems like a clear enough question that it would be hard even for the Bushies to dance around it. Either you think the government should honor those bonds or you don’t.

Perhaps someone in the White House press corps would like to give this a try, if only for the sport of watching Scott McClellan tap dance around it. Of course, you never know: maybe he’d actually answer the question. I’m sure it’s happened before.

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