This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

SPIN METER: Obama And His Social Security Warning

By CALVIN WOODWARD

WASHINGTON (AP) â¿¿ No one doubts dire things will happen, and fast, if the government runs out of borrowing authority in coming weeks. But late Social Security checks need not be among them.

President Barack Obama's blanket statement Monday that "Social Security checks and veterans benefits will be delayed" if Congress doesn't raise the debt limit masked the options open to the government if it is forced to operate in a severe fiscal pinch. There are many, although none pleasant. If Washington can't keep borrowing to ensure all its bills are paid, it will need to decide which expenses to cover and which might have to slide until a deal comes together.

It's possible, but not preordained, that Social Security recipients, veterans and beneficiaries of other cherished programs would take a hit. The administration has choices in how to spread the pain.

Highlighting a threat to the most popular products of the government is a time-honored Washington tactic for turning up the heat on the other side to negotiate and settle.

Few may care, or even know, if spending is slashed on the multitudes of private contractors who do work for the government, one likely consequence if the government runs out of borrowing room. But Obama knows lawmakers will get an earful from constituents if Social Security checks are late in coming.

The political predilection for hyperventilated worst-case scenarios was dubbed the Firemen First principle in 1989 by Charles Peters of The Washington Monthly, and is known in other quarters as the Washington Monument ploy. It's the threat that a budget cut will force firemen and police to be laid off, or the iconic monument to be shut, when in fact there are other ways to save money. (It so happens the monument is closed, but for earthquake repair.)

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,584.33 +227.46 1.31%
S&P 500 2,043.49 +30.60 1.52%
NASDAQ 4,716.9290 +72.6170 1.56%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs