Glenn Kessler has a useful column assessing Senator Rand Paul's claims about how default could be avoided if we reached the debt ceiling, however he does get one important item wrong. The piece implies that it would be possible to save money to pay debt service or other top priority items by not making Social Security payments.

This is not true. The money held by the Social Security trust fund is part of the debt subject to debt ceiling. If money is not paid out to Social Security beneficiaries then there is more money in the Social Security trust fund.

This is a dollar for dollar relationship. This means that every dollar that the government does not have to borrow on public markets to make Social Security payments is an additional dollar owed to the Social Security trust fund, leaving no net change in the amount of borrowings subject to the debt ceiling. This means that the payment of Social Security benefits does not affect whether or not the government breaches the debt ceiling.

There is one other item in this piece that deserves comment. It reports an assessment from the Government Accountability Office that higher interest rates from the August 2011 standoff will lead to $19 billion more in interest payments over a ten-year period. It is unlikely that many Post readers have the ability to assess the importance of $19 billion in the federal budget over a 10-year period. If we turn to the Center for Economic and Policy Research's magnificent responsible budget calculator we see that this would be roughly 0.045 percent of projected spending over the period from 2012-2021.


Addendum: Kessler added a note making this point.