Please stop repeating false Republican talking points!

[Igel]

25. You rely on a really crucial hair-splitting definition.

That the special-issue "trust fund" bonds are of the same legal status and have the same status as "public debt" as regular issue T-bills held by the public. Moreover, that there's no way to legally separate the two and redefine them.

All that's required is that the special-issue bills be reclassified as a kind of public debt not covered by the Constitution (considering that it's a kind of debt that didn't exist when the Constitution was penned, not a big problem). Then they could "default" on them by merely altering the terms of redemption. This would trigger no Constitutional sanction. Since they're a special issue, there's no need for investors to think that the value of other T-bills, those clearly publicly held, are at risk. This would amount to a slight internal reorganization of the executive branch, nothing more, done by a simple redefinition and a law that is then clearly within Congress' power--all the more so since it affects mostly government accounting. (Congress has separate authority to alter the terms and conditions of SS benefits, and has done so repeatedly over the years. It couldn't readily deprive the SSA of funding without altering entitlement payments without violating the law, although it's unclear to me that anybody would have standing to challenge Congress' actions if it did violate the law.)

Of course, there are simpler ways of doing it that don't rely on judges' accepting a redefinition.

The SSA is a critter of Congress. It's created by Congress. It's funded by Congress. (It's a part of the administration and executive branch not really under the control of the chief executive.) The monies levied for it by Congress are just taxes that Congress has decided it'll keep separate and turn over in toto to the SSA. Congress has no special authority for different kinds of taxes, it just has a general taxation authority. This means that the SSA has only the rights and privileges that it's granted.

Congress could require that the SSA forgive the debt and rip up the special-issue Treasury bills. Or it could repurpose the FICA monies at any time and tell the SSA that if it wants them it has to redeem the Treasury bills it has. It could even pay off the total amount and then require that the SSA return any unspent funds to the general treasury, leading to a 30 second increase in the money supply of several trillion dollars (best done at 2 a.m. when the markets are closed Three non-default ways of accomplishing precisely what a default would.