Obama suggesting Social Security going broke

Karl Rove:

President Barack Obama and Congress face a mess if the federal government hits the debt ceiling Aug. 2. The Bipartisan Policy Center, a Washington think tank, projects that the government will receive $172 billion in revenues between Aug. 3 and Aug. 31, but it is on the hook to spend $306 billion, leaving a shortfall of $134 billion.

On Tuesday, Mr. Obama told Scott Pelley of CBS News that "there may simply not be the money in the coffers" to issue Social Security, veterans and disability checks after Aug. 3.

Not so. The $172 billion in revenues collected over the rest of the month can pay the $29 billion interest charges on the national debt, Social Security benefits ($49 billion), Medicaid and Medicare ($50 billion), active duty military pay ($2.9 billion), Department of Defense vendors ($31.7 billion), IRS refunds ($3.9 billion), and about a quarter of the $12.8 billion in unemployment checks due that month.

There will, however, be no cash for highway construction, no checks for federal workers or retirees, no agriculture payments, no open national parks. Interest rates are also likely to rise if U.S. debt is downgraded, adding massively to the deficit and further damaging the economy. This would be a disaster with no political winners.

The president wants a $2.4 trillion debt-ceiling increase to get him past next year's election—and the deal he's proposing is based on promised future cuts paired with substantial tax increases on households earning more than $250,000 a year.

House Speaker John Boehner proposed matching a debt-ceiling hike with substantial spending cuts. The Congressional Budget Office estimates federal spending at $46.1 trillion over the next 10 years, a dramatic escalation from projections before Mr. Obama took office. Mr. Boehner's modest proposal was to trim that back 5.2% over the decade, but the president balked.

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This showdown has already put the lie to Democrat statements that Social Security and Medicare are solvent. He is now admitting that he does not have the money to pay for them without making drastic cuts to other government operations. Yet he is resisting any changes that will put the programs on the road to solvency. He is staying with the same irresponsible approach to spending that has marked his administration from the beginning.

Having now played his trump card to starving granny Obama remains frustrated that the GOP is not willing to capitulate on his plan to raise taxes to confiscatory levels for those who are already paying the bulk of income taxes.