PA Budget Debate

Toomey: Prioritize Debt Service

Pat Toomey Official Portrait

US Senator Pat Toomey (R-PA)

With one week to go before America’s August 2nd debt ceiling deadline, Senator Pat Toomey (R-PA) is drumming up support for a fallback plan.  At a Capitol Hill news conference, Toomey introduced the Full Faith and Credit of the United States and Protecting America’s Soldiers and Seniors Act.  “What our bill would do is it would instruct the Treasury secretary, in the event the debt ceiling is not raised prior to August 2nd, to make certain obligations priority so that they will be paid in full, on time and without delay,” Toomey stated.     

The legislation would prioritize the interest on America’s debt, Social Security payments and the payroll for active duty military personnel.  By placing interest payments atop that list, Toomey says the nation would not default on its debt, and not plunge into economic chaos.  “This bill is not and is not meant to be a substitute for raising the debt limit,” Toomey said.  “What this bill is all about is minimizing whatever disruption might otherwise occur if the debt limit is not raised prior to August 2nd.”

This comes the day after President Barack Obama and US House Speaker John Boehner (R-OH) held dueling primetime television appearances.  “The American people may have voted for a divided government, but they didn’t vote for a dysfunctional government,” the President chided.  But, Speaker Boehner says the President won’t accept ‘yes’ for an answer.  “Even when we thought we might be close to an agreement, the President’s demands changed,” rebuked Boehner. 

That back-and-forth among Washington’s biggest powerbrokers set the stage for Toomey’s Tuesday news conference.  “At this late stage in the process, it’s obvious now to everybody that it is possible – increasingly possible – that we will not have raised the debt ceiling by August 2nd,” Toomey said.

If Congress fails to reach a compromise, and if there is a default on the nation’s debt, the credit rating agencies could downgrade America’s bond rating.  That, in turn, could lead to higher interest rates for everyone.  But, this is not entirely uncharted territory.  Senate historian Don Ritchie says the debt ceiling has been raised at least 80-times in recent history, and stalemates have become somewhat common since the 1980s.  “At some point they’ve always managed to work out an arrangement, even though there were quite often stark differences of opinion between the two sides,” Ritchie said, providing at least some reason for optimism.

Senior citizen woman

New Report says Senior Citizens Have Seen Their Buying Power Decline.

Senior citizens are having to stretch their dollars more after two years without a Social Security Cost of Living Adjustment according to an advocacy group.   The Seniors Citizens League says older Americans have lost 32% of their buying power since 2000.

The group’s 2011 survey of senior costs report shows housing, utilities, transportation, health care and food costs are among those that have risen the most.

Mary Johnson, Social Security and Medicare Policy Analyst, says health care costs are not fully reflected in the COLA seniors receive and she says that has a lot to do with why it’s not keeping up with the costs.  For example, Johnson says Medicare Part B premiums have risen 154% since 2000.

Johnson says we need to start with a more fair and reliable COLA. She says the League supports legislation that would more accurately reflect senior costs.  She adds they also support a guaranteed minimum COLA.

Johnson says seniors are making difficult choices as a result of the loss of buying power. Some are delaying necessary visits to the doctor and filling prescriptions. Johnson says some seniors have younger relatives who are unemployed living with them and some older Americans are returning to the job market to supplement their income.

The Senior Citizens League is an advocacy group that was first established as a special project of The Retired Enlisted Association. The full report is available at their website.