Wednesday, December 07, 2005

Repo Men

Another reason we all might miss O'Connor once she's gone.

The Supreme Court ruled unanimously Wednesday that the government can seize a person’s Social Security benefits to pay old student loans.

Retiring Justice Sandra Day O’Connor wrote the decision that went against a disabled man, James Lockhart, who had sued claiming he needed all of his $874 monthly check to pay for food and medication.

Lockhart, 67, a former postal worker who now lives in public housing in Seattle, has heart disease, diabetes and other health problems. He has about $77,000 in student loan debt.

Everyone may want to stop considering whether or not they want to get that PhD after all. Nor should you let that student loan money pile up as you get on in the years. The counter argument was this:

Groups like the AARP and the National Consumer Law Center had urged the court to safeguard Social Security benefits in the Lockhart case, arguing they “are critical in preserving a measure of financial independence for older and disabled workers.”

That is a load of steaming zebra crap. I'm sorry, but turning old shouldn't immunize you from the world. Just because you've hit retirement age doesn't mean you should get a "get out of debt free" card. Again, Social Security is an income insurance program. It's meant to be insurance and an annuity in case you live too long and don't have savings to cover it. And, as Social Security checks are income, you should have to use them to pay back debt. Student Loans, especially of a magnitude that great, are a financial investment in yourself and they carry risk. The investment may not pan out. The government already helps in providing below market-rate interest to help offset the positive externalities of it, so that's already one thing in your favor. Allowing you to escape it merely because you went on the social security rolls is ridiculous. Dodge the creditors long enough and you can get away clean!

Scalia concurred with O'Connor, and argued rightly that Congress passed legislation that basically contradicted and effectively repealed the Social Security Act when it authorized the government to collect on old student loan debt. If Congress said the government should aid in the collections, then it should, and it should sieze people's Social Security checks if need be.