Federal Reserve Chairman Ben S. Bernanke on Tuesday urged Republicans to support raising the nation’s borrowing limit. He said threatening to block the increase to gain deeper federal spending cuts could backfire and worsen the economy.
Even a short delay in making payments on the nation’s debt would cause severe disruptions in financial markets, damage the dollar and raise serious doubts about the nation’s creditworthiness, Mr. Bernanke said.
It wasn’t Mr. Bernanke’s first warning to Republicans, who are vowing to block an increase that doesn’t include a deal to slash government spending by the same amount. But it was his most explicit in terms of the consequences.
The nation reached its $14.3 trillion borrowing limit last month. Treasury Secretary Timothy F. Geithner has said the U.S. could default on its debt if it doesn’t raise the limit by Aug. 2. The debt limit is the amount the government can borrow to help finance its operations.
Agency makes billions in improper payments
The Social Security Administration made $6.5 billion in overpayments to people not entitled to receive them in 2009, including $4 billion under a supplemental income program for the very poor, a government investigator said Tuesday.
In all, about 10 percent of the payments made by the agency’s Supplemental Security Income program were improper, said Patrick P. O'Carroll Jr., the inspector general for Social Security. The program has strict limits on income and assets, and most of the overpayments went to people who did not report all their assets, Mr. O'Carroll said.
Error rates were much smaller for retirement, survivor and disability benefits, which make up the overwhelming majority of Social Security payments, Mr. O’Carroll told a congressional panel.
“By any standard, the scope of these problems is considerable,” said Rep. Charles W. Boustany Jr., Louisiana Republican and chairman of the House Ways and Means oversight subcommittee. “Regardless of whether a payment occurs because of simple error or outright fraud, improper payments harm Social Security programs in the long term, jeopardizing benefits for those who may need them in the future. They also cost taxpayers billions of dollars each year.”
Social Security also made nearly $1.5 billion in underpayments in the 2009 budget year, Mr. O'Carroll said.
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