Has anyone heard of FICA? The other day, Sean Hannity was interviewing Laura Ingraham and was ranting about Obama’s threatening seniors regarding social security checks. Recall the president said that he does not know if the money would be there in August to pay seniors if the debt ceiling were not raised. Hannity said that there were enough revenues to pay seniors. Ingraham rightly pointed out that social security is a pay as you go system with current payments coming out of FICA receipts. Hannity was confused. He said “I thought they had depleted the lockbox.” Ingraham patiently pointed out that yes: those monies had been siphoned off into the general tax fund and spent but still there were enough coming in from FICA to pay current recipients. I don’t think Hannity ever understood. Fast forward to an interview of an Obama supporter and Stuart Varney of the Fox News network. The Obama apologist said that the payments to the government were lumpy and the needed amount may not be at the treasury when the checks had to go out. Varney then insisted that the treasury secretary could then make a decision as to who would get paid when and the president was being irresponsible. At no time in the conversation were FICA payments even mentioned. At present the estimate is that we have another 25 years or so until FICA receipts no longer cover promised payments. Perhaps that is why Harry Reid said that we don’t have to worry about social security until 2036. Maybe Harry Reid should tell this to Obama in the debt ceiling talks.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com