Reply #17: The payments out are just "obligations." [View All]

The bonds held by the SSA are possibly public debts. Depends what "public debt" meant in the 1860s and how that term would apply to to a kind of bond and debt that came along nearly a century later. It boils down to what some lawyer can convince the federal judiciary the term must now mean, and what the federal judiciary can be convinced the term means. What that is is far from obvious.

Consider this:

The SS debt qualifies as public debt for the purpose of the debt ceiling.

Still, the bonds held by the SSA haven't always shown up consistently in deficit and debt calculations for budget purposes as debt.

They can't actually be owned by anybody in the public because, by law, they can only be owned by a branch of the federal government. In what sense is public debt that can't be held by the public "public"? Who would be able to question it, in any meaningful sense?

Congress authorized the IRS and other agencies to forgive debts legally owed to the government, right? If the "trust fund" is debt owed to the government, why couldn't Congress forgive it? The debt would go away--which is a strange kind of public debt. I could forgive money owed to me by the Treasury; but the government couldn't forgive money owed to me.

Moreover, the debt's only due when the SSA presents it. If the SSA doesn't present the bonds for redemption, the Treasury doesn't have to redeem them. Notice that it's unclear if the beneficiaries have any say in this.

And, of course, a naive reading would say that if the SSA did present the bonds and the Treasury refused to honor it, the SSA wouldn't be allowed to question the debt. "We presented the bonds and they didn't honor them" would be questioning the debt. Strictly speaking, it says something about speech, not fulfillment. We only infer that "shall not be called into question" refers to acts by the government and not by creditors.